Not everyone is happy about the chain’s ‘Amazonification,’ but it’s clear the new owner has big plans for the natural channel leader.
- “Amazon’s acquisition has injected some life into Whole Foods,” whose same-store sales had been dwindling prior to the sale, says Don Stuart, managing partner at Wilton, Conn.-based Cadent Consulting. “Before the acquisition, many vendors weren’t sure Whole Foods was still going to be around for much longer.”
- Price cuts aren’t the way the chain is delivering value, notes Cadent’s Stuart, citing a recently announced 5% rebate for Prime members who pay with their Amazon Prime Visa card. Eventually, he adds, Prime will become Whole Foods’ new ‘affinity’ program through which it will deliver exclusive discounts on popular items and additional savings via regular weekly sales. “This is something Walmart does not have,” he says. “It appears the chain doesn’t think collecting data and better targeting shoppers is worth it.” Clearly, Amazon knows better.
- Private label currently represents about 15% of Whole Foods’ revenue, though that figure is expected to rise as store brand offerings are expanded. “An expanded private label focus…and the implementation of brand rationalization practices means fewer national brands and more space for private label,” says Stuart. ‘We expect Whole Foods to thrive and become much bigger,’ he concludes. “We look at its partnership with Amazon as a win for Whole Foods, its shoppers and vendors smart enough to partner and build relationships with the chain.”