Amazon’s imprint on Whole Foods is becoming unmistakable, eight years after the tech giant bought the natural-foods chain for $13.7 billion.
In suburban Philadelphia, a pilot program is using “ShopBots” in a store’s backroom to retrieve items such as Tide Pods and Pepsi ordered through the Amazon app—an attempt to satisfy shoppers seeking mainstream brands without putting them on Whole Foods shelves. In Chicago, a separate test converted the flagship store’s café and seating area into a 3,800-square-foot Amazon Grocery kiosk stocked with conventional staples from Kraft to Doritos, positioned to catch customers as they exit.
The trials arrive as Amazon consolidates its grocery businesses under Whole Foods CEO Jason Buechel, who earlier this year was tapped to oversee Amazon Fresh and Amazon Go as well. Whole Foods’ corporate staff—though not store employees—are slated to become Amazon employees in December, part of a broader restructuring that included layoffs last week. Internal changes also shift corporate compensation toward Amazon stock and phase out a longstanding in-store discount after a year.
Amazon says the tighter integration is intended to simplify operations and invest in customer experience, following years of sluggish growth in a fiercely competitive industry. Despite the 2017 deal, Amazon’s grocery market share has remained under 4% by some estimates, even as Whole Foods has expanded to 547 stores with roughly 106,000 employees. The company is also pushing speed: a same-day fresh-grocery delivery rollout to 2,300 U.S. cities is underway, and “Project Fusion” tasks some Whole Foods teams with fulfilling certain perishables ordered on Amazon.com.
Brand questions loom large. Supporters argue that co-locating conventional goods can capture a greater share of each trip’s spending. Critics—among them some employees and natural-food suppliers—worry that blurring the line between Amazon’s mass-market approach and Whole Foods’ ingredient standards could chip away at hard-won cachet. Inside stores, staff describe a more metrics-driven culture, even as Whole Foods maintains that turnover is down and quality standards remain intact.
Source: wsj