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Amazon and Whole Foods - Eat Your Kale and Have It Delivered Too?

The announcement that Amazon is buying Whole Foods Market for $13 billion took the grocery retail world, indeed the entire brick-and-mortar retail world, by storm. Competitors' stock prices plummeted and analysts scrambled to make sense of the deal.

We used the TXN spending analytics software leveraging over 3 million credit and debit card accounts, to get some insight on the Amazon-Whole Foods acquisition.

Customer Base

When looking at grocery store spend in the cohort of Amazon Prime members, Whole Foods tops the list with 33.3% of the cohort also spending at Whole Foods in the last 12 months:

The picture is similar with all Amazon.com customers...

And the attachment is even stronger for Amazon Prime Now customers:

Nearly 1/3 of all Amazon.com customers and half of Amazon Prime Now customers are shopping at Whole Foods. Put another way, Amazon customers love Whole Foods. And they love it more than any other chain in the country.

In addition to just customer overlap, we took a look at the average spend per customer. Amazon Prime members spend 25.4% more per customer than the average customer at Whole Foods:

Amazon Prime Now customers spend 34.2% more...

And Amazon.com customers spend 15.9% more than the average customer at Whole Foods:

When comparing spend per customer, while Whole Foods doesn't top the list of grocery stores, Amazon customers are definitely more valuable than the average Whole Foods customer -- and show a stronger affinity for Whole Foods than all but a few of the 50ish supermarkets we've analyzed!

In short, we see a very strong existing overlap between Amazon and Whole Foods customers.

Ripple Effect

One often discussed implication of this joining of forces is the potential introduction of grocery delivery from Whole Foods.

When looking at affinity between Whole Foods customers and grocery delivery companies:

We notice Instacart and FreshDirect topping the list:
3% of Whole Foods customers already use Instacart, and 69.2% of Instacart customers also shop at Whole Foods.
1.6% of Whole Foods customers use FreshDirect, representing 61.5% of the FreshDirect customer base.

Amazon's own grocery delivery service, available only in a few markets, also shows strong affinity to Whole Foods:
1.5% of Whole Foods customers used Amazon Fresh in the last 12 months and 51.1% of Amazon Fresh customers also shopped at Whole Foods in the same period.

For context, Amazon Fresh is still trailing its largest competitors in the grocery delivery industry by total sales, while Instacart just overook FreshDirect as the industry leader:

It's reasonable to speculate that Amazon will leverage the acquisition to propel itself to the top of the list of Whole Foods delivery providers, pushing down the likes of Instacart and FreshDirect.

Learn more about consumer spending analytics with TXN.