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Whole Foods Seeks to Calm Key Vendors with Meeting After Tensions Build

Whole Foods Seeks to Calm Key Vendors with Meeting After Tensions Build

Tuesday, March 13th, 2018

Whole Foods has set the date for a summit during which the company hopes to appease vendor concerns, according to CNBC. On March 19th, the retail chain plans to smooth out its relationships with its suppliers in hopes of easing the transition to Amazon ownership.

Invites to the event were sent out last Friday via email, and CNBC explained that the meeting is hoping to stabilize the company's relationships with brands after some of Amazon’s takeover efforts ruffled feathers.

According to the news source, relationships have grown tense since Amazon’s acquisition of Whole Foods, when the grocer reportedly began to shift from a focus on local sourcing to a more centralized orientation that potentially privileges nationally-recognized brands. The company's transition in focus from the micro to the macro is creating a stir in vendors, which fear the retailer is sacrificing the selection and relations making it unique. Amazon’s acquisition of the retail chain has been named the cause for upsetting structural shifts in business designs, which we have been reporting along the way, though not all changes have come in the wake of the takeover.

For example, the company recently proposed a servicing fee as it tries to charge for displaying efforts Whole Foods makes to centralize vendors’ products. This is in opposition to brokers, which help food companies work through what has been called “the most expensive mileage on the planet,” according to CNBC, as supplies make their way from the stock room to the shelves. To establish more shelf-space for certain products, brokers tend to display and care for products that they represent as part of their job.

Whole Foods storefront

The Washington Post reported that the company is hoping to charge between three and five percent of sales for some companies as it seeks control over the broker-side of the display process. The hike in fees and stressful strain this shift puts on vendors’ relationships with brokers has upset vendors. Because of the increase in fees, companies could have less funds and product as they work with their brokers in other retail locations. This step would grant Whole Foods all of the data it collects since brokers will be cut out of the process and, in doing so, will give the retailer a direct line between the stores and the vendors they supply, the source explained.

Will Whole Foods be able to soothe vendors’ worries as it continues to dish out changes in the wake of Amazon’s acquisition? Deli Market News will report on the latest details as the story develops.

Whole Foods Market