Under Amazon, Whole Foods Is In Danger Of Becoming Efficient

 George Anderson , Contributor

Whole Foods’ new 365 store, Fort Greene, Brooklyn, NY – Photo: RetailWire

The news, which was first reported by Business Insider, is part of Whole Foods’ efforts to centralize its operations. The shift away from local decision making has been a source of consternation among many of the chain’s vendors, particularly smaller ones, who fear they may be cut out as Whole Foods makes decisions based on how much suppliers are willing to spend for shelf space, displays and promotions.
“Deep cuts in local marketing can easily detach the retail store from the community of which it is a part,” said strategy architect Lyle Bunn of the RetailWire BrainTrust in an online discussion last week. “Support of local events and teams can give way to policies that close out community groups and initiatives, making the brand yet another faceless seller of stuff.”

“If Amazon makes it too vanilla, it will become just another grocery store and they might as well go ahead and buy Kroger too (a strange purchase, that would be, by the way),” said Paula Rosenblum, managing partner at RSR Research. “I think net/net, Amazon is definitely starting to stray too far from Whole Foods roots.”
Whole Foods recently held a meeting with roughly 200 suppliers to clarify how the chain plans to run its business under Amazon’s ownership.
“The changes we’ve been making across the company directly address the feedback our supplier partners have shared over the years about the challenges of our decentralized purchasing structure and inconsistent practices across regions and stores,” said Robin Rehfield Kelly, a spokesperson for Whole Foods, in a statement.

“Whole Foods was not the greatest business when it was acquired by Amazon,” wrote Ricardo Belmar, senior director of worldwide product marketing at InfoVista, on RetailWire. “We’ll continue to see Amazon trying to fix things and improve on processes, etc. in the future. In this case, it appears the positions eliminated have more to do with trying to establish consistent branding across the chain than anything else.”
“Yes, some customers may view this as losing its ‘local’ appeal, but the true measure of ‘local’ in a grocery store has more to do with product than graphics branding and signage,” said Mr. Belmar.
f the moves toward centralization.
“In truth, Whole Foods is not nearly customer-centric enough,” said Neil Saunders, managing director at GlobalData. “It tends to focus on things that its management and staff find important, not what shoppers find essential. It is operationally flabby. And despite the Instagram-friendly displays of produce, retail disciplines are nowhere near where they should be. Someone needs to come in and shake the tree. And Amazon will do just that.”
“I’m hoping that Amazon will create a buying atmosphere more user-friendly to consumer brands so that Whole Foods will look at new items, and new innovations, on a chain-headquarters basis,” said David Biernbaum of David Biernbaum & Associates. “I think that Whole Foods misses out on many new opportunities due to the current store-by-store buying mentality.”
But others saw an inevitably mixed bag in the grocer’s Amazon-driven moves.
“One the one side, Amazon knows its business and always has a relentless eye for improving customer experience, specifically through efficiency and pricing,” said Jeff Miller, director of marketing at OceanX. “So a more streamlined organization should help them accomplish that goal. On the other side, part of what made Whole Foods great and unique was a genuine connection to the community that these local roles seemed to be integral in creating.”

  “Overall for Whole Foods, improved efficiency is a plus; the loss of local marketing is a minus,” said John Karolefski, editor-in-chief of CPGmatters.