Whole Foods' price cuts drew customers from Trader Joe's, Target

It's been six weeks now since Amazon grabbed the public's attention by announcing eye-popping price reductions at the grocery chain it bought whose notoriety for high prices garnered it the nickname "whole paycheck."

Now various data analyses and reports are coming in, looking at which retail competitors turned out to be the biggest losers as a result of the price changes at Whole Foods while also raising questions about just how deep and sustained those price cuts really were.

One thing seems clear. The price cuts brought a lot more curious customers to Whole Foods when they first took hold in the last week of August. According to an analysis of mobile phone location data by Thasos Group, foot traffic to Whole Foods spiked 17 percent that week, but it seems to have been fairly short-lived. Traffic tapered off in subsequent weeks to about 4 percent higher than the same time last year.

The largest percentage of new customers, the firm found, came from people who regularly shop Walmart (24 percent), followed by Kroger (16 percent) and Costco (15 percent).

What about Target? Many expected the Minneapolis-based retailer to be one of the most vulnerable to the Amazon-Whole Foods merger. But it didn't see as big of an impact, at least not initially because of the price cuts, as some analysts had thought.

While it didn't land in the top 3 of the list above, Target did make another list when the researchers analyzed the data another way, accounting for the relative size of the customer base of the retailers to figure out which retailers felt the biggest sting.

Taking that into account, Thasos calculated that about 3 percent of Target's customer base defected to Whole Foods.

But those who suffered the most, according to the analysis, was Trader Joe's, which saw 10 percent of its customers heading to Whole Foods, and Sprouts Farmers Market, where the defection rate was 8 percent.

That's not surprising given research from consulting firm Magid whose data shows that 45 percent of Trader Joe's shoppers already also shopped at Whole Foods, compared to 23 percent for Target,19 percent for Costco, 9 percent for Walmart and 8 percent for Kroger.

So here's another lingering question: How deep were the price cuts at Whole Foods and how far across the board did they go?

Gordon Haskett analyst Chuck Grom attempted to answer just that by analyzing a basket of 110 items at a Whole Foods in New Jersey over the last several weeks to gauge the depth and change in prices before and after the acquisition.

He found that the average prices on that basket of items actually went up 1.1 percent.

While acknowledging that prices of some items saw significant drops, such as items in the bakery, he said prices crept up on other items, notably frozen food items.

So the net effect of the cuts, he concluded, was basically negligible.