Whole Foods uses Thanksgiving deals to nab new customers

Dive Brief:

Everyone is gobbling about Amazon's new Thanksgiving promotions for shoppers at Whole Foods, which were announced yesterday in a company press release. Beginning today, Whole Foods will offer deep discounts to Prime members on organic turkeys at $2.99 per pound and antibiotic-free turkeys at $1.99 per pound. Shoppers without a Prime membership will still receive promotional pricing at $3.49 and $2.49 per pound, respectively.
Prime members shopping at Whole Foods will also receive up to 10% off a number of items throughout the store and additional discounts on holiday food items, such as organic cranberries and frozen beef broth. To incentivize non-members, Amazon is offering $20 off of a Whole Foods purchase of $20 or more when a customer signs up for Prime.
Prime memberships will also benefit last-minute holiday shoppers, with members having access to Prime Now grocery delivery in more than 60 cities, grocery pickup in select markets, and daily Whole Foods grocery delivery and pickup. On Thanksgiving Day in select cities, Whole Foods grocery pickup will be available until 1 p.m., and delivery will be available until 2 p.m.

Dive Insight:

This is a smart move by Amazon to boost Prime memberships ahead of the busy holiday shopping season. Offering special promotions to food-focused shoppers at Whole Foods who might not otherwise use Amazon, is sure to engage some new Prime members who just want to enjoy the discounted turkey and cranberries. And, once they are members and begin enjoying the everyday discounts from Amazon and Whole Foods, they're more likely to renew in the coming year.

The other major benefit that might convert some Whole Foods shoppers to Prime members is the promise of grocery delivery or pickup, which requires a membership. Especially this time of year, shoppers run short on time or don’t want to fight the crowds in-store, and Prime Now allows them to utilize delivery and pickup services. For a harried Thanksgiving host, the price of Prime may be well worth the convenience for this holiday alone.

Notably, this year's turkey discounts at Whole Foods are the same as last year's. A number of other retailers are offering Thanksgiving turkey discounts that are far better than Whole Foods pricing. Safeway is offering a free turkey with a coupon download and a purchase of $100 or more. Hy-Vee is giving away a turkey with the purchase of a ham, and Giant is letting shoppers swap gas rewards for a free turkey. Kroger has turkeys for $0.37 a pound, while BJ's Wholesale Club is offering same-day delivery on Butterball turkeys for $0.89 per pound.

It may not have been obvious to everyone at the outset how Amazon would benefit from its acquisition of Whole Foods, but Thanksgiving could prove to be a major reason. Connecting with shoppers at the start of the holiday season, and ahead of Black Friday, is sure to win them a wave of new Prime members — which will translate to holiday dollars. That could be particularly significant this year, with holiday spending projected to be more than $1.1 trillion, more than 5% higher than last year. Clearly, for Amazon, there's a lot more to Thanksgiving than discounted turkeys at Whole Foods.

Whole Foods has had a fairly uncertain year with Amazon at the helm. Amazon's most recent earnings showed that Whole Foods has been growing slowly, and that the dramatic grocery disruption people expected hasn't yet come to fruition. There have also been serious concerns around Whole Foods this year with lawsuits and employee efforts to unionize. It will be interesting to see if this year’s holiday push gives Whole Foods an end-of-year boost or if it positions Amazon more favorably with its grocery audience.

As a result of the Amazon acquisition, Whole Foods is offering a very different value proposition for shoppers than it did a couple years ago. While the pre-Amazon era would have focused on organic, high-quality turkey and upscale foodie Thanksgiving offerings as its primary selling point, now the "organic" label is secondary to the deep discounts available to Prime members. Whether that's for better or for worse is for shoppers to decide.