September 13, 2011, 1:10 PM

LivingSocial bags a deal with Whole Foods Market

Consumers have bought more than 900,000 of the grocery vouchers.

Lead Photo

LivingSocial today sent a nationwide offer of $20 worth of groceries for $10 from Whole Foods Market to each of the daily deal operator’s more than 32 million members in the U.S.

The deal, which went live at 5 a.m. Eastern time and is available for 24 hours, had sold more than 900,000 vouchers by 5:30 p.mIf the deal maintains its current pace it could approach LivingSocial’s record deal of 1.3 million Amazon.com discount vouchers sold in January.

LivingSocial and Whole Foods say they hope to sell 1 million vouchers.

To further entice shoppers to purchase the voucher, 5% of the proceeds from the deal will go toward the Whole Foods’ Whole Kids Foundation, whose goal is to educate and inspire families to improve children’s nutrition and well-being. The foundation’s Facebook page allows consumers to vote to disburse those funds to either healthy cooking classes aimed at educating teachers on nutrition or to grants for school gardens.

Demand for the vouchers is slowing down LivingSocial.com, which has sparked comments on Twitter, such as “Is everyone trying 2 buy @WholeFoods deal on @LivingSocial? There site is not working” and “Haven't tweeted in like 20 odd days but had to say that @LivingSocial’s customer service' is non-existent. Will never buy from again!!!” The spokesman acknowledged the slowdown and says LivingSocial’s technical team is working to resolve the issue.

Today’s offer could prop up LivingSocial’s revenue, which in August dropped 3% to $45 million from $46.4 million, according to data compiled by daily-deal aggregator Yipit. During the month rival Groupon’s revenue jumped 13% to $120.7 million from $106.6 million. That marked the second consecutive month that Groupon gained and LivingSocial lost revenue.

Moreover, in its first full month, Groupon Getaways, the daily deal leader’s travel offering, outperformed LivingSocial Escapes in the travel deals segment. Groupon’s offering generated 42% more revenue than LivingSocial Escapes and averaged 78% more revenue per deal, according to Yipit. Its data are estimates based on its tracking of daily deal companies throughout North America. The data exclude mobile offerings such as Groupon Now and LivingSocial Instant Deals.

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