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Amazon May Gain Millions of Prime Members from Whole Foods

9/18/2017 stands to gain millions of new members in its Prime subscription program from Whole Foods Market’s current customer base, according to new research from New York-based financial services firm Morgan Stanley.

According to the new report, as shared by CNBC, almost two out of five Whole Foods shoppers (about 5 million households), aren't Prime members. 

"We expect Amazon to convert half of these shoppers between now and the end of 2019," Brian Nowak, a Morgan Stanley analyst, wrote in a note to clients shared by the news service. "We see AMZN's Prime member growth and engagement, Echo device sales and consumer web traffic/interest driving solid top-line trends and GMV [gross merchandise volume] per customer growth."

Nowak added that Whole Foods’ sales will grow by 12 percent annually through 2022. The Austin, Texas-based grocer will also reach 3.3 percent share of the U.S. grocery market over the next five years, hitting an estimated 2.1 percent by the end of 2017, CNBC said. New shoppers will drive the growth, as the retailer offers “more competitive pricing and increased convenience.”

The Prime program – which boasts 80 million-plus members and, for $99 a year, offers free two-day shipping, music and video streaming, as well as other amenities – could offer some convenience and incentive to shop Whole Foods, as it's supposed to become the grocer's rewards program. According to Nowak, 80 percent of U.S. Prime members (38 million people) currently don't shop Whole Foods.

Seattle-based Amazon already has benefited from its acquisition of Whole Foods. According to new research from Rockville, Md.-based Packaged Facts, the grocer’s branded product web sales reached $500,000 in the first week after the acquisition's Aug. 28 completion, following Amazon’s placement of roughly 2,000 items from Whole Foods' 365 Everyday Value private label on its website.

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