Is Amazon a major threat to Trader Joe’s?

Trader Joe’s and Whole Foods have successfully expanded in lock step over the last few decades, but a new report asserts the arrival of Amazon Prime discounts is helping Whole Foods pull ahead.

The report from Sense360, which tracks data from smartphones, analyzed the impact of Prime discounts at Whole Foods. The study aggregated GPS location data from nearly 100 apps and millions of users, tracking trips to Whole Foods locations and competing stores within a one-mile radius.

The report shows that Whole Foods’ and Trader Joe’s market share were almost on par in 2017, with 51 percent of shoppers choosing Whole Foods and 49 percent, Trader Joe’s. But over the last year, Whole Foods has gained two percent in market share over Trader Joe's.

Sense360 said the gains are beneficial to Amazon because Trader Joe’s and Whole Foods both attract "urban influencers" — highly educated, high income consumers — that will now be drawn into Amazon’s ecosystem.

While lowering prices may be reducing Whole Food’s “Whole Paycheck” image, Sense360 believes Prime discounts have been the game changer. First introduced by Amazon in February, Prime perks at Whole Foods include 10 percent discounts on all products, cash back on Amazon-Visa card purchases and deals on select items.

An accompanying survey found that 33 percent of all consumers plan to shop more at Whole Foods, and 50 percent of Prime members plan to increase their visits. Fifty-six percent of existing Prime members said the Whole Foods program increases the likelihood they will renew their Prime membership.

As noted by Bloomberg, Trader Joe’s competes head-to-head against Whole Foods in many markets, whereas the major food sellers, including Walmart and Kroger, have little overlap with Whole Foods.

But Sense360s found that — although not as much as Trader Joe’s — Whole Foods has increased market share when located in close proximity to almost every national competitor in the grocery sector, as well as drugstores and discount stores.

A survey from consumer products research firm Tabs Analytics likewise shows Whole Foods making strong traffic gains this year.

• The Impact of Amazon Prime on Whole Foods – Sense360
• Sense360 Report: Amazon's Whole Food Acquisition Already a Winner After Year One – Sense360
• Is Amazon’s Whole Foods starting to steal Trader Joe’s shoppers? – Bloomberg
• Analyst: Prime perk could eventually double customers at Whole Foods – RetailWire
• Whole Foods to become a Prime perk for Amazon’s customers – RetailWire