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The Wall Street Journal reports that now that Whole Foods is owned by Amazon, it is speeding up the process of centralizing the way it makes buying decisions and changing some of the ways in which it deals with vendors.

According to the story, “Under the changes planned to begin in April, Whole Foods’ 470 locations will no longer allow brand representatives to promote their products or check to make sure they are stocked and displayed correctly.
Whole Foods also is centralizing much of its decision-making regarding the assortment of products across the country. Instead of allowing brands to frequently pitch their products to individual stores or regions, Whole Foods executives in its Austin, Texas headquarters will choose a higher percentage of the items stores carry.”

The Journal writes that Amazon is hoping that it can drive higher sales at Whole Foods, which it recently bought for $13.7 billion, by standardizing its processes and prices, and it expects to make these changes front and center during its quarterly management meetings next week in Seattle.
KC's View:
It seems to me that Amazon may be walking a bit of a tightrope here - it wants to impose greater discipline on Whole Foods in a way that will help it attract more shoppers, but it doesn’t want to make changes that it affect Whole Foods’ essential value/values proposition. Whole Foods always has been a place where small, entrepreneurial suppliers could not just find a home by dealing with stores and regions, but also could find a place where it would have a voice to explain their products to shoppers. I’ve always thought of that as being a differential advantage, and I think they have to be careful about it - this could disenfranchise not just some suppliers, but also its own employees, who may not cotton to losing some of their autonomy.

One thing intrigues me, though it may just be an issue of the language being used by the Journal, which writes that this is part of a “continuing push to operate more like a traditional market.” It seems to me that one of Amazon’s differential advantages has been its willingness and ability to not just avoid tradition, but stomp all over it. Hard for me to imagine that the purchase of Whole Foods has somehow prompted Amazon to embrace tradition now.