Amazon targets Aldi and Target with a new lineup of ‘no-frills’ groceries
By Jordan Valinsky, CNN
New York (CNN) — Amazon is taking a page out of Aldi and Target’s playbook and launching a new line of budget-friendly food items in an attempt to attract price-conscious shoppers who are ditching name brands to save money.
Amazon is rolling out a new “no-frills” private label brand called Amazon Saver, with most items priced at less than $5 and that include an array of household staples and pantry items such as cookies and crackers and perishable items like sliced turkey and ham. More than a hundred additional items will be revealed in the coming months.
The company has several private label food brands, including Amazon Fresh, 365 and Happy Belly, but Saver is the company’s lowest priced brand, which “complements the company’s selection of private label brands designed to provide the best value for a range of grocery products,” Amazon said in a statement.
Amazon is also taking aim at its rivals, including Walmart, Target and Aldi, all of which have cheaply priced private label brands that are popular with customers, as retailers look to retain shoppers despite stubbornly high grocery prices.
A few years of high inflation has forced customers to reevaluate their spending habits and made them prioritize value, especially in grocery shopping, since many similar items are sold at different prices depending on the brand.
“Amazon still has big ambitions in grocery, so it needs to jump on this bandwagon as well as sharpen its value for money position,” said Neil Saunders, retail analyst and managing director at GlobalData Retail. “Saver products will help the business to accomplish this as it provides stronger opening price points.”
Saunders told CNN that it’s vital that Saver has “reasonable quality,” because shoppers “do not want cheap products; they want good products with low prices.”
Shoppers have pulled back spending in the past year as costs have risen 20% to 30% higher than they were three years ago and as incomes failed to keep up, Sarah Wyeth, managing director, retail and consumer with S&P Global Ratings, previously told CNN.
Amazon also said that starting Tuesday it would add more grocery discounts for Prime members, its $139 yearly membership program. Shoppers at its roughly 50 Amazon Fresh stores and online are getting price cuts on more than 3,000 items.
Typically, Prime members get a 10% discount, but now they can get up to 50% off eight to 15 grocery items that change weekly, including fresh produce and meats. And more than 1,200 rotating grocery items from popular brands will be discounted 25%. Prime members will also get an additional 10% off its new lineup of Saver products.
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