Whole Foods cut prices on 25% of its assortment to shed its 'Whole Paycheck' image

What was changed

In a June 2024 Fortune interview, CEO Jason Buechel laid out how Whole Foods — the upscale grocer Amazon bought in 2017, with more than 500 US stores and about $20 billion in annual revenue — was breaking with its 'Whole Paycheck' reputation for priciness. Grocery prices were up 22% since 2021, food-at-home took a bigger share of US discretionary spending than in 30 years, and even middle- and upper-middle-class shoppers were 'gravitating toward where they feel the best deal is,' he said. Customers were also trading down to the 365 private label, a shift that persisted as inflation cooled.

The answer was price. In 2024 the chain cut prices across 25% of its assortment and leaned on scheduled promotions — $1 oysters, $2 off rotisserie chickens on Tuesdays — to court deal-hunters. Buechel said lowering prices is harder than it sounds, because Whole Foods' quality and animal-welfare standards (such as selling only cage-free eggs) narrow its supplier pool. He framed the deals as 'democratizing' healthy grocery shopping for shoppers willing to work the promotion calendar.

Amazon does not break out Whole Foods' revenue, but the grocer makes up the bulk of Amazon's physical retail segment, where revenue grew 6% in the most recent quarter — outperforming rivals like Kroger, per Fortune. Whole Foods kept expanding, with plans to open 30 new stores a year.

Why it worked

Food inflation of 22% since 2021 made even affluent customers deal-seeking, threatening the premium basket.

Trade-down to 365 store-brand items persisted even as inflation cooled, so the price gap risked permanent share loss.

With more than 500 US stores and 30 openings a year planned, the chain could not afford to alienate any customer group.

What can be applied

A premium grocer can concede on price without conceding identity: cut a defined slice of the assortment, run scheduled deals, and let quality standards stay as the differentiator.

Aftermath

Buechel, who joined Whole Foods in 2013 and became chief executive in 2022, said the company was also diversifying suppliers and drafting backup plans for climate-disrupted crops such as leafy greens and berries, and sold about 350 items from regenerative agriculture. He argued the way to stay out of culture-war fights was to speak only on issues tied to the business, like animal welfare: 'If we don't do something different, [climate change] is going to significantly impact yields of what we're growing,' he said.