Whole Foods is cutting prices -- and it's hitting Trader Joe's hard

Amazon‘s acquisition of Whole Foods is rocking the grocery industry.

As soon as the e-commerce giant’s $US13.7 billion acquisition of Whole Foods formally went through in August, the changes began, from cutting costs to internal restructuring.

According to a report by alternative data intelligence firm Thasos Group, which analysed mobile phone location data, Whole Foods’ foot traffic climbed 17% year-over-year the week of price cuts.

Three weeks later, traffic was still up 4% year-over-year.

These new customers seem to be coming from other grocery chains.

Almost 10% of regular Trader Joe’s customers defected to Whole Foods each day the first week after the Amazon acquisition, when the price cuts went into effect. While the figure dropped after the first week, Trader Joe’s still had a 6% defection rate three weeks after the acquisition.

The defection rate shows customers ditching a competitor for Whole Foods as a percentage of the total regular customer base. It’s calculated by taking the percentage of regular Trader Joe’s customers — people who visit the chain at least twice a month — that go to Whole Foods instead of Trader Joe’s or another grocery rival on a given day.

The first week after the acquisition, for example, almost one in 10 regular Trader Joe’s shoppers went to Whole Foods instead of going to Trader Joe’s.

Other retailers that were hit hard by Trader Joe’s price cuts include Target and the organic supermarket chain Sprouts.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.