Foot Traffic Shows That Amazon Fresh, Whole Foods Aren't Cannibalizing One Another
Amazon Fresh customers increasingly also shopped at Ralphs and Aldi and less at Whole Foods.
Competition is decreasing among Amazon Fresh and Whole Foods, in a move one expert says underscores the e-commerce giant’s approach to diversifying its offline brands.
An analysis from Placer.ai of the company’s cross-shopping foot traffic data shows that Amazon Fresh customers increasingly also shopped at Ralphs and Aldi and less at Whole Foods over the second half of 2021.
“While Amazon Fresh is positioning itself as a value grocer, whose primary competition comes from grocers such as Ralphs and Aldi, Whole Foods is positioned as a premium supermarket chain that appeals to a whole different consumer base,” writes Placer.ai’s Shira Petrack. “With Whole Foods and Amazon Fresh catering to different segments, Amazon is set to strengthen its standing as an offline grocery leader in 2022.”
Amazon opened the first Amazon Fresh location in Woodland Hills, California more than a year ago and now operates 20 such stores nationally, including in Irvine, Northridge, Fullerton, and Whitter in California and Naperville, Oak Lawn, Schaumburg in Illinois.
“By April 2021, the novelty wore off, so Q2 through Q4 foot traffic trends can reveal how well these Amazon Fresh grocery stores have embedded themselves into their communities,” Petrack says. “So far the data looks promising. Between Q2 ‘21 and Q4 ‘21, visits grew for every single one of the eight stores analyzed. While part of the growth may be due to initial COVID-related capacity restrictions, the fact that store occupancy rose across the board at these early locations indicates that these venues are generating increased demand over time – a positive sign for any retailer.”
Locations like Woodland Hills and Oak Law also saw the size of their true trade area increase from Q2 to Q4, but most saw their TTA decrease or remain steady, Petrack says.
Meanwhile, “while Whole Foods may have missed out on the pandemic-fueled supermarket boom, the natural grocery leader’s recent foot traffic data has proved naysayers wrong, Petrack says. Whole Foods has slowly been closing its year-over-two-year visit gap, and visits were down just 5.2% in December over 2019 levels. The company also announced plans to open 40 new stores.