Calabasas CA
5-08-2022 12:46am

Whole Foods closes Tarzana & Amazon Fresh Choice Open in Encino

Some facts about Amazon

  • 2018 - surpassed 100 million Amazon Prime members
  • 2022 - Distribution Warehouse openings have slowed down & even been postponed
  • 2020 - A Brick Meets Click report suggested in the future Amazon will target affluent U.S. households, executing three key strategies:
    • use Prime to push more purchases by affluent consumers
    • place grocery-driven stores in areas where they already have high-usage consumers,
    • grab shoppers with premium private label

After a year the Topanga Amazon Fresh Choice location has moved from 50% Whole Foods/ 365 products to easily less than 15% as the AFC "Aplenty" label is now the more dominant "premium private label".

Amazon's competition began duplicating their methods even as far back as 2020: Walmart, Kroger and Target saw the ecommerce grocery market as a permanent means to increase market share without building new brick and mortar stores.  Note, interestingly Costco is not mentioned in this discussion. While Costco is popular across all demographics, it is easy to ascertain which segment Target owns: the mommy market.  The market Sears & Roebuck dominated for decades. One-stop-shop.  "First to Sears then to School" was their mantra for years and Target realized that once "mommy" is in the store it is easier to get lunch supplies while getting toiletries, and other food items.  Target targets the packable lunch customer. Their banana prices are competitive with the lowest in town: Trader Joes (which by the way is the snack and wine market demographic).

A recent first-quarter loss, for Amazon, 

has resulted in closing only six Whole Foods locations across the country.  The Tarzana store was the only location closed in Southern California, originally opened in 2010 the store closed within days of the announcement; leaving us to ask will this become an Amazon Fresh Choice?  The other soon-to-be-opened store occupies a former Ralphs's store in Encino.  Clearly the size of that Amazon Fresh Choice and its location on "the Boulevard" is indicative of the corporate goal to target more affluent consumers.

How does all this benefit you? 

 The grocery profit margin is extremely small. The recent threat of a grocery strike had less impact than 10+ years ago, primarily because there are so many more options to not cross the picket lines.  Corporate Kroger & Safeway (Albertson's Pavillions Von's) know this and a strike even for days could implode any margin of traffic they have a lead over Amazon.

So on Tuesday, when the food-supply mailer's go out keep this in mind:

  • Ralph's and Von's want to grab your loyalty
    • Gas points used to be a lure but at <1.00 or a low .20 a gallon savings it's not the biggest incentive.
    • Exclusive coupon offerings from Fresh Choice can be lucrative but subject to mail-box theft
  • Whole Foods weekly sales are visible online they don't provide print advertisements
  • Trader Joe's still relies on a multiple page in depth descriptive booklet distributed monthly to let you know what is available but they never have weekly sales to entice your loyalty
  • The smaller discount stores often have very limiting caveats to their specials.
  • Costco sends a quarterly flyer but the prices are rarely on a meeting point with most food needs.

AND LASTLY - chasing down every special at 10 different possible suppliers, grocery stores, is blog worthy material but the reality is YOUR TIME is valuable and unless you own a massive B&B the long range success to preserve your budget for yourself or immediate family is consistently shop at 1-2-3 stores and plan your meals around THEIR sales.

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