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Amazon’s Whole Foods acquisition is slowly resulting in changes for the supermarket chain. Amazon wants to introduce the Prime system to every store and at the same time, a lot of executives are leaving the company.
Higher costs
Earlier this week, Amazon announced it would have a meeting with Whole Foods’ suppliers, who had expressed worries about Amazon’s intended strategy for the chain. Some of the concerns were from prior the acquisition, when Whole Foods increased costs for suppliers.
Amazon wants Whole Foods to professionalize and become more aggressive. As soon as the acquisition was announced in June 2017, the stores welcomed an additional 1.3 % of customers.
Prime meets Whole Foods
To continue that improvement, Amazon wants to bring its Prime members to Whole Foods. These should get discounts on the chain’s most popular items and will get weekly exclusive discounts. According to Amazon and Whole Foods, participation in the program is the best way for suppliers to continue their growth.
Whole Foods also wants to simplify its company structure, to save costs and to collaborate with suppliers more easily. They not only had to deal with the main office, but also with the local teams in the past. The new system would only have a deal with the main office, which would bring new products to stores faster. Smaller companies will still have the opportunity to only deal with the local stores.
Amazon is also looking for larger Whole Foods locations which could double as a store and a distribution center for online orders. This way, it hopes to get its most popular Amazon products to the customer faster. A further integration between Amazon and Whole Foods will help Amazon cut costs, which it direly needs. It will also allow it to further expand its two-hour delivery service, Prime Now.
Board members are jumping ship
Whole Foods’ board has also undergone quite a few changes since the acquisition. Plenty of board members have apparently left the company already, partially because they are not looking forward to the Amazon collaboration. More than a dozen board members have already abandoned ship. Some of them have done so out of their own free will, but others say they have been pushed aside.
