Kroger stock lower as Amazon promises lower prices
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Kroger stock lower as Amazon promises lower prices

Kroger doesn't seem to have a clearly defined plan
to help fend off this new pressure.

Sorry, supermarkets: Inc. just confirmed that your worst nightmares are about to come true.

Ever since the e-commerce giant announced in June that it had agreed to buy Whole Foods Market Inc., speculation had been in overdrive about how their combined powers could shake the grocery industry.

Amazon announced that it would start cutting prices at Whole Foods on Monday, making an immediate bid to solve a problem that has plagued the grocer for ages: Its prices are simply uncompetitive now that it is far from the only organics game in town. Wal-Mart Stores Inc., Target Corp. and Kroger Co. are all in the organics business now, and shoppers have noticed.

The move suggests that Amazon is ready to do what it has done in so many other corners of the retail business: Hustle after market share and worry about profit later.

Two of Amazon's immediate techniques with Whole Foods show the Seattle company's particular brand of ruthless genius.The Low Price Halo: Amazon employs a clever trick with its online shopping mall that it seems to be bringing to Whole Foods, too. The company's prices aren't necessarily the lowest across the board.

But Amazon carefully picks and chooses some popular or highly visible products and cuts their prices to the bone. That gives Amazon the reputation of having the lowest prices around.

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