Specialty food suppliers may find themselves having a harder time getting space on Whole Foods’ shelves come next year, according to The Wall Street Journal. The publication shared that Whole Foods will be centralizing its product decision-making to its executives in Austin, Texas, as well as discontinuing its practice of using brand representatives to promote specialty products come April 2018.
According to The Wall Street Journal, instead of allowing brands to pitch their products to individual stores or regional sectors, executives at headquarters will choose a higher percentage of the items stores carry. This has been in the works for some time, WSJ says, but Amazon’s acquisition earlier this year sparked the fire to move towards more traditional forms of supplying.
Analysts believe the goal here is primarily to boost sales across the board at Whole Foods, with Amazon seeking to standardize both operations and prices. Since the acquisition, Whole Foods traffic and sales have already been showing improvement, particularly because of significant price drops on several key items.
Whole Foods has carved out a unique niche for itself among large retailers in offering representatives of lesser-known products the chance to promote their products in-store. Some of these suppliers now worry their specialty products’ sales will suffer substantially without having consultants available to explain the nuances and benefits of items that many customers have yet to experience. Some consultants have told WSJ that they expect local brands to take their products elsewhere due to the change.
“This is a major inflection point,” said Jay Jacobowitz, President of Retail Insights. “The product mix at Whole Foods will shrink. The niche lines will trickle out to other grocers.” One prediction in WSJ’s article is that Whole Foods may offer brand advocacy in-house for a fee similar to what they pay the third-party providers, providing better results and a more streamlined way of operating the practice.
WSJ reports that these changes will likely be discussed further at next week’s quarterly meeting in Seattle. The source reports that Whole Foods representatives have already informed suppliers and third-party brand representatives about the plans during a series of closed-door meetings at a conference last week.
With these practices predicted to come into play as soon as April of next year, the retail industry may be seeing shifts in supply practices soon. Keep following Deli Market News for the latest updates.