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According to data from Placer.ai, foot traffic at Whole Foods fell about 25% in September over the previous year. Although some of the decline is attributed to consumers shopping more online, the Amazon-owned grocery chain is also facing competition from rivals Kroger and Walmart. Yahoo Finance’s West Coast correspondent Melody Hahm breaks down the details on The Final Round.
SEANA SMITH: But Melody, I want to ask this to you because it's interesting. We talk about how Amazon has seen an uptick, obviously, a big uptick in traffic over the last several months during the pandemic. But one division of its business, Whole Foods-- we talked about this before-- just seems to be the odd man out. Because there is recent data out showing that we saw a decline in Whole Foods's traffic.
Now you would expect this in grocery stores over the last several months as more people shift their behavior. People aren't as comfortable going into stores. But the drop that we saw at Whole Foods was much more significant than some of its competitors.
So I think this brings into question, one, why Whole Foods continues to struggle, and then also just the broader question just about how it really fits into Amazon's playbook here going forward.
MELODY HAHM: I think that's what Amazon executives are trying to figure out themselves. Let's recall, it was just three weeks ago we had the CEO of Whole Foods, John Mackey, on this very program. And we asked him about that, right?
As Amazon tries to create its own product mix, its own branded Amazon Fresh supermarkets-- the first one opened here right around me in Los Angeles. It's 35,000 square feet, which is the typical size of a Whole Foods. Where does Whole Foods exist, right? The whole paycheck mantra and reputation have not really paid off, right, especially during pandemic times.
And as Dan, I think, had pointed out during that interview, the buffet line, the hot food was a really prime destination for a lot of folks, especially during their busy lunch breaks, if they wanted something that felt healthy and wholesome. And that has largely been thrown out the window.
So, to your point, Seana, this placer AI data that shows that foot traffic was down 25% in the month of September from a year ago shows that perhaps this is writing on the wall that Whole Foods may be perhaps a brand that they're phasing out, especially if you look at all of the evidence that Amazon is continuing to be bullish in the grocery space, just under a different name.
SEANA SMITH: Yeah, certainly. Well, going to be interesting to see how Whole Foods exactly tries to turn it around going forward. But again, Amazon shares, at least for today, rising almost 3% on the heels of that call from JP--