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Walmart takes on Amazon in grocery wars

Amazon acquires Whole Foods
Immediate price cuts expected Monday as Amazon takes over Whole Foods 01:51

Walmart-owned will launch a higher-end grocery line targeting millennials, just over a year after Walmart spent more than $3 billion for the fast-growing online retailer amid more intense competition from Amazon (AMZN).

Amazon last month closed on its $13.7 billion acquisition of Whole Foods, as Walmart (WMT), Target (TGT) and other supermarkets fight to win a bigger slice of the grocery market. And pushing private brands offers high profit margins since stores have control of sourcing. Whole Foods has done well with its private label 365 By Whole Foods Market, which is being expanded to said Friday that the new brand, called Uniquely J, will focus on younger customers in urban areas, offering them select coffee, olive oil, paper towels and other products.

What is Amazon's long-term strategy for Whole Foods? 02:53, which sells products including clothing, gadgets and home furnishings, will also be carrying some of the niche brands like ModCloth and Bonobos that Walmart has acquired in recent months. ModCloth is now starting to be carried on Jet, while Bonobos will be some time next year, according to Walmart officials.

The moves are part of an overall strategy by Marc Lore - who founded in 2015 and is now head of Walmart's U.S. e-commerce - to set the startup apart from the website and make it more upscale. is built on a real-time pricing algorithm that determines which sellers are the most efficient in value and shipping and adjusts prices based on what items are in the checkout cart, as well as how far the desired products are from the shopper's home. 

So as shoppers throw items in their cart, they're encouraged to continue shopping and build a more efficient cart and buy items labeled "smart cart" for more savings.

Amazon cut prices almost immediately on a number of items at Whole Foods after it closed on the deal. Walmart has done the same over the past month.

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