In the wake of its acquisition by Amazon, Whole Foods has been in the news for lowering its notoriously high prices. While consumers might be happy with this development, local suppliers are feeling the pinch. To try to maintain these reduced prices and create a more cohesive product line, Whole Foods is introducing new rules for its suppliers to streamline and centralize operations—rules that many local suppliers consider very onerous.
The new rules have two main provisions. The first holds that suppliers might hand over control of their merchandise handling, inventory and displays to retail strategy firm Daymon. The second provision states that suppliers who sell over $300,000 worth of goods per year must down discount grocery products by 3% and health and beauty products by 5%.
These rules, say some, will make it very difficult for smaller suppliers to earn a profit and maintain their unique flair. Though Whole Foods will no doubt have a more streamlined operation thanks to these changes—along with more consistent product branding—critics of the move say a potential loss of local brands will hurt its image with consumer who appreciate local offerings.
The question of the day: is Amazon moving Whole Foods away from its core values and hurting the powerful brand in the process?
