Summary: On March 19, Whole Foods Market will have a meeting with their key vendors that will address tensions concerning their move to centralizing merchandise. Normally, most food grocers pay brokers to manage the process food merchandise go through. However, Whole Foods is taking their own route to control this process themselves. By April 2018, all suppliers are required to use SAS for in-store demonstrations, as their single provider of in-store merchandising services. Most of their large suppliers will have to bear the cost of outsourcing, which means a mandatory 3% discount on food products and 5% discount for health and beauty products.
Analysis: I don't particularly mind Whole Foods' decision to centralize their merchandise. I do still think most Whole's Foods' key venders will continue their business with them because customers will become more open to purchasing their product for a much lesser price. Especially, when Amazon began putting the Whole Foods private-label on their site, they are much more exposed to customers.
Questions:
1. What do you think about Whole Foods centralizing their merchandise?
2. Do you think Whole Foods' key vendors will continue their business with them? Or do you think they will seek business somewhere else?
2 comments:
Hopefully, centralizing the merchandise would mean cheaper goods for us as consumers, as the cost of production goes down. Hey, if I'm getting tomatoes for a cheaper price then I ain't complaining. But yeah, I'm curious to see the long term effects of centralizing their business like this.
I agree with Jason in that the long term consequences of this move will be interesting. The article brought up an interesting point, that Amazon, now that it owns Whole Foods, will now have more data readily available with the centralization of their merchandise. Moreover, they can be more protective of this data and use it to their advantage. This is typical of amazon, and this move may end up helping them, as they’re some of the best number crunchers out there. I think this all works out for Amazon the most in the end.
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