As Whole Foods continues to integrate with Amazon and introduce more national brands to its shelves, the retailer is moving to change practices that affect its suppliers, according to a recent report by the Chicago Tribune. Whole Foods has shifted its supply management policies in an effort to streamline its operations, continue its forward trajectory, defray costs associated with category management and merchandising, and allow the company to continue working with local suppliers.
"For the last two years, we have been working to streamline our processes to ensure all our suppliers are supported and set up for success," Don Clark, General Vice President of Purchasing for Nonperishables, said in a statement. "The changes to our in-store execution and demo programs are creating a consistent, high-quality experience that benefits both our suppliers and our customers."
While Whole Foods marks changes in supplier policy as changes toward a more efficient, customer-friendly market experience, according to the Chicago Tribune, some suppliers feel that Whole Foods' changes are not in the best interest of the supplier.
Valerie Gray, maker of Italian Heart’s Gourmet Foods pasta sauce, who sells her product to the Whole Foods in Reno, Nevada, told the Chicago Tribune, “It feels like that local, personal touch is going away. It's hard to set ourselves apart anymore in the sea of well-known national brands.”
Under the new rules, Whole Foods suppliers will work exclusively with Stamford, Connecticut-based retail strategy firm Daymon and its subsidiary, SAS Retail Services, to schedule in-store tastings, check inventory on shelves, and create displays on the behalf of vendors.
Whole Foods will require a three to five percent discount from suppliers who sell $300,000 of goods annually to pay for this service, reported the Chicago Tribune. Whole Foods sees this trade off as necessary to further propel the business and promote the local partnerships it now has, but many suppliers feel differently.
This reaction from both the retailer and its suppliers, follows a similar reaction to Whole Foods' earlier decision to centralize retail strategy. How will Amazon's push to make Whole Foods more accessible to a wider audience shape both brands identities in the coming years?
To stay up-to-date on all changes that have and will come in the wake of the Amazon takeover of Whole Foods, keep reading Deli Market News.