Since being acquired by Amazon in early 2017, Whole Foods has been attempting to reshape its vendor policy, to realize synergies with its parent and new efficiencies brought about by scale while remaining true to a brand identity that is, in many respects, deeply tied to the retailer’s relationship to small scale vendors.
This March, the company convened a summit for vendors to vent concerns over changes in vending policy and to reach consensus on what a mutually beneficial vendor relationship between the retailer and its suppliers would look like. But a new report by The New Food Economy suggests that Whole Foods may be passing the cost of its much-vaunted price cuts on to its suppliers, despite inroads made between the retailer and its vendors this spring.
The New Food Economy’s reports that Whole Foods is planning to implement a 10 percent “scanback charge” for products on sale through the company’s Prime Savings Program. An internal email obtained by the news source outlines the new charge—describing a scheme in which, when a customer purchases a sale item, the extra 10 percent offered to Prime customers will mandatorily be charged back to the vendor—potentially compounding the hit the that vendors take on sale priced items.
And while The New Food Economy notes that promotional pricing is a key tool for many small vendors attempting to grow their brands, Whole Foods has, so far, provided no information on how many shoppers will be taking advantage of its new discount program and how new scanback charges are anticipated to affect sales and vendors' bottom lines.
To read the news source’s report in its entirety, click here.
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