Shares in British supermarkets dipped this morning after US giant Amazon said it would slash prices at its newly acquired Whole Foods grocery chain.
The $13.7 billion (£10.7bn) deal will see the Seattle-based online retailer take over Whole Foods operations in America and in the UK, where it has nine stores, including one in Giffnock, East Renfrewshire, that opened in 2011.
• READ MORE: Amazon to buy organic grocer Whole Foods for $13.7bn
From Monday, when the takeover completes, products such as bananas, avocados, eggs, salmon, organic baby kale and rotisserie chicken will see price cuts.
In addition, a selection of Whole Foods products will be available on AmazonFresh, the firm’s online supermarket which delivers to 302 postcodes across London and the south-east of England.
Shares in Britain’s listed supermarkets followed their US peers into negative territory off the back of the news.
By noon, Tesco was down 1.8 per cent, with Sainsbury’s almost 1 per cent down and Marks & Spencer and Morrisons both 1.1 per cent lower.
Jeff Wilke, chief executive of Amazon Worldwide Consumer, said the firm was “determined” to make healthy and organic food affordable for everyone, and warned “this is just the beginning” as he pledged to “continuously lower prices”.
Britain’s so-called “big four” supermarkets – Tesco, Sainsbury’s, Asda and Morrisons – are already reeling from an assault on their market share by discount rivals Aldi and Lidl, with the German duo sparking a bitter price war that has eroded profit margins.
The emergence of another player with significant firepower is likely to pile further pressure on the sector.
Whole Foods was founded in Texas in 1978 and has more than 460 stores across the US, Canada and UK.
With some 87,000 staff, Whole Foods generated sales of about $16bn last year. Its brand will be retained following its takeover by Amazon.