Whole Foods is now cheaper than Kroger for home-delivered groceries

Business Insider

Whole Foods is cheaper than Kroger for home delivery of groceries.

• Whole Foods is 2% to 7% cheaper than Kroger for home-delivered groceries, according to a Barclays price study.
• That's a huge advantage for Whole Foods, which has been trying to shed the image that it's overpriced.
• Kroger still beats Whole Foods on in-store prices, however, with prices that are 14% cheaper, on average, compared to Whole Foods.

Whole Foods is cheaper than Kroger for home-delivered groceries, according to Barclays analysts.

Whole Foods recently started offering home delivery in select cities through Amazon Prime Now. Kroger, on the other hand, offers home delivery through the app Instacart. Both provide delivery within two hours of ordering.

Whole Foods was cheaper than Kroger by 2% to 7% on grocery orders in the Cincinnati area costing $35 to $50, the analysts found.

"After factoring in the cost of items purchased, differences in basket size, delivery fees, and credit card incentives, WFM 2-hour delivery is actually priced at a discount to Kroger/Instacart," the Barclays analysts wrote.

That's a huge advantage for Whole Foods, which has been trying to shed the image that it's overpriced - a perception that has earned it the nickname "Whole Paycheck."

Kroger, on the other hand, is often cited as a low-price leader when it comes to groceries.

The Barclays study did not account for the cost of Prime membership, however, which is $99 annually.

The analysts considered the membership fees a "sunk" cost.

"Considering there are ~75 million Prime members in the country (~60% of US households), it is likely that many customers will not view the cost as incremental," analysts wrote.

While it's cheaper to get groceries delivered from Whole Foods, Kroger is still cheaper for customers who shop in stores.

Analysts compared baskets at both stores in the Cincinnati area and found that Whole Foods' in-store prices were 14% higher than Kroger's.