The retailer has also set its sights on an even bigger opportunity: Convincing more of its approximately 100 million Prime members in the United States to buy their groceries at Whole Foods.
Amazon has been trying to make Whole Foods more attractive to Prime members since the acquisition. Amazon initially cut prices on products such as salmon and avocados. Then it started offering an extra discount on items exclusively for Prime customers last year to sweeten the Whole Foods offer.
Despite these steps, Prime members still avoid shopping at the organic grocery chain. Only about 18% of Prime members shop at Whole Foods at least once per month and 70% of Prime members say they rarely or never shop at Whole Foods, according to a recent survey by Wolfe Research.
Whole Foods' high prices have been a big reason why Prime members have stayed away. Although Amazon made splashy discounting moves at first, Whole Foods' prices have creeped back in recent months and remain well above rival supermarkets.
"Amazon and Whole Foods are still there," said Tory Gundelach, an analyst at Kantar.
Although Whole Foods helped make natural and organic items popular with a broad swath of Americans, it has become a victim of its own success.
Bigger chains like Kroger, Albertsons and Aldi have taken note of Whole Foods' appeal and expanded their own exclusive lines of organic food. Kroger's Simple Truth grew 1
Natural and organic foods are not something that appeals to a specific high-income group anymore. It's the way most buyers are eating, "Gundelach said. "
Morgan Stanley analyst Vincent Sinisi found that Whole Foods' prices for a basket of 60 items have risen for three straight months and were 15% higher than traditional grocery stores in March, including 30% higher in protein.
"It is now clear that Amazon has pulled back on incremental price cuts," said Sinisi in a research report Monday
But Amazon will again try to lower prices on hundreds of items at Whole Foods and will double the number of weekly deals for Prime members.
Kantar's Gundelach said that grocery stores often cut prices on products and the latest round of cuts applied to a fraction of the approximately 60,000 items at Whole Foods' stores. "This may not have a big impact," she said.
Southeastern Grocers, the owner of Winn-Dixie and Bi-Lo, and Tops Markets have recently filed for bankruptcy. More could be on the way, analysts predict