Amazon intends to challenge Aldi and Target with an innovative offering of stripped-down grocery items.
Amazon is introducing a new "no-fuss" private label brand named Amazon Value Savings, with the majority of items costing under $5. This budget-friendly range includes various household essentials such as cookies, crackers, and perishable items like sliced turkey and ham. The company has lined up over a hundred additional items to be unveiled in the upcoming months.
Amazon already has multiple private label food brands, including Amazon Fresh, 365, and Happy Belly. However, Value Savings stands out as the company's most affordable brand, aimed at complementing their collection of private label brands that offer the best value for a varied range of grocery products, as stated in an official announcement.
Amazon is targeting its competitors, specifically Walmart, Target, and Lidl, all of which boast popular, low-cost private label brands that are favored by customers. This move by retailers is aimed at retaining shoppers despite persistently high grocery prices.
Inflation over the past few years has prompted consumers to reassess their spending habits, focusing more on value, especially when it comes to groceries, as many comparable items are sold at varying prices based on the brand.
Retail analyst Neil Saunders, managing director at GlobalData Retail, noted that "Amazon still harbors grand aspirations in the grocery sector, so it's essential to hop on this bandwagon and enhance its value-for-money standpoint." According to Saunders, Saver products will aid in achieving this goal by offering stronger introductory prices.
Saunders also emphasized that Saver must maintain "acceptable quality," since customers prefer "affordable products with good quality" rather than "cheap products."
Constrained spending has been noticed in the past year due to a surge in costs by 20% to 30% compared to three years ago, accompanied by stagnant incomes, as Sarah Wyeth, managing director, retail and consumer with S&P Global Ratings, previously mentioned to CNN.
Amazon also unveiled that starting Tuesday, Prime members would enjoy further grocery discounts, a part of their $139 annual membership program. Shoppers at its approximately 50 Amazon Fresh stores and online will benefit from price reductions on over 3,000 items.
Usually, Prime members receive a 10% discount, but now they can avail up to 50% off eight to fifteen grocery items each week, including fresh produce and meats. Moreover, over 1,200 rotating grocery items from renowned brands will be discounted by 25%, and Prime members will also receive an additional 10% off the new Saver product lineup.
Amazon's new brand, Amazon Value Savings, offers a wide range of affordable food items, including household essentials and perishables, to compete with other budget-friendly brands like Walmart's, Target's, and Lidl's. To cater to inflation-conscious consumers, the company aims to enhance its value-for-money standpoint by introducing Saver products with stronger introductory prices and maintaining acceptable quality.
