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Thasos Report: Walmart Customers Accounted for 24% of Whole Foods’ New Customers, the Largest Percentage Among Competing Stores

Thasos Group, an alternative data intelligence firm that transforms real-time locations from mobile phones worldwide into objective and actionable insights, today published a research report, “Competitive Impact of Lower Prices at Whole Foods,” analyzing numbers, composition and behavior of new customers at Whole Foods stores following significant price reductions in the wake of the chain’s acquisition by (NASDAQ: AMZN) on August 28, 2017.

Key Findings Include:

Foot traffic to Whole Foods increased 17% year-over-year during the week of the price reduction beginning on August 28.

As of the week ending September 16, foot traffic decelerated to 4% year-over-year, but remained elevated relative to the three weeks preceding August 28.

Walmart’s (NYSE: WMT) regular customers accounted for the largest percentage (24%) of Whole Foods’ new customers in the week of the price reduction.

Among Whole Foods’ competitors, Trader Joe’s saw the highest rate of customer defections: on average, nearly 10% more daily customers of Trader Joe’s defected to Whole Foods in the week of the price cuts relative to the week prior. The same calculation for Sprouts yielded 8%.

Whole Foods’ new customers overwhelmingly belonged to the same upper income demographic as the company’s traditional customer base. Defecting customers in the week of the price cuts came from the wealthiest segment of each competing store’s customer base.

Overall, the report finds that foot traffic at Whole Foods spiked sharply following the August 28 announcement of price cuts, driven primarily by new customers, but has since settled in at lower, but still elevated levels. Walmart, Kroger (NYSE: KR), Costco (NASDAQ: COST) and Target (NYSE: TGT) provided the largest numbers of new customers, while Trader Joe’s, Sprouts (NASDAQ: SFM) and Target saw the highest percentage of their own regular customers defecting to Whole Foods. The price reductions were insufficient to attract new kinds of customers, as the report found new customer demographics (including income levels and distance driven to a given store) largely matched those of existing customers.

Based on the largest repository of high quality mobile phone location data after Alphabet/Google (NASDAQ: GOOG) and Apple (NASDAQ: AAPL), and with little demographic bias, the Thasos platform provides unparalleled visibility into foot traffic at retail venues throughout the day, every day, with coverage including approximately 90% of major U.S. supermarket chains, both public and private.

Top 5 Sources of Whole Foods’ New Customers, August 28 – September 3, 2017

  1. Walmart24%
  2. Kroger 16%
  3. Costco 15%
  4. Target 11%
  5. Sam’s Club 5%

Top 5 Regular Customer Defection Rates, August 28 – September 3, 2017

  1. Trader Joe’s 10%
  2. Sprouts 8%
  3. Target 3%
  4. Costco 2%
  5. Safeway 2%

“Knowing which stores new customers have defected from, what income levels they represent, how far they traveled to get to Whole Foods, and ultimately, whether they will continue to shop there after trying it out, are invaluable pieces of information for both investors and the stores themselves,” said Greg Skibiski, Thasos Group CEO and Founder.  “We all know that Amazon’s acquisition of Whole Foods has the potential to be a gamechanger in the grocery space, and in the ‘brick-and-mortar versus online’ battle more broadly. It will be extremely interesting to watch the winners and losers emerge from the data over the coming months.”

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