new York
CNN
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Amazon is taking its cue from Aldi and Target and is launching a new line of inexpensive groceries. The company wants to appeal to price-conscious shoppers who avoid branded products for cost reasons.
Amazon is launching a new, no-frills private label called Amazon Saver, with prices under $5 on most items and a range of staples and pantry items like cookies and crackers, as well as perishables like turkey and ham, with over a hundred more items coming in the coming months.
The company has several private label grocery brands, including Amazon Fresh, 365 and Happy Belly, but Saver is the company’s most affordable brand, which “complements the company’s selection of private label brands designed to provide the best value across a range of grocery products,” Amazon said in a statement.
Amazon is also targeting its competitors, including Walmart, Target and Aldi, which all offer low-cost private label products that are popular with customers as retailers try to retain customers despite stubbornly high grocery prices.
Several years of high inflation have forced consumers to rethink their spending habits and prioritize price, especially when shopping for groceries, as many similar items are sold at different prices depending on the brand.
“Amazon still has big ambitions in the grocery business, so the company needs to jump on that bandwagon and improve its value proposition,” said Neil Saunders, retail analyst and managing director of GlobalData Retail. “Savings products will help the company do this by offering stronger entry-level prices.”
Saunders told CNN it was critical that Saver offered “reasonable quality” because shoppers “don’t want cheap products; they want good products at low prices.”
Consumers have cut back on spending over the past year as costs have risen 20 to 30 percent from a year earlier and incomes have failed to keep up, Sarah Wyeth, managing director of retail and consumer at S&P Global Ratings, previously told CNN.
Amazon also announced that starting Tuesday, there will be additional discounts on groceries for Prime members, the annual membership program costs $139. Shoppers in the roughly 50 Amazon Fresh stores and online will receive discounts on more than 3,000 items.
Prime members usually get 10% off, but now they can get up to 50% off eight to 15 weekly rotating grocery items, including fresh fruits and vegetables and meat. And more than 1,200 rotating grocery items from popular brands are 25% off. Prime members also get an additional 10% off the new line of Saver products.
