retail news in context, analysis with attitude

CNBC has a piece about what has changed at Whole Foods in the five years after Amazon acquired the company for $13.7 billion…

•  "Amazon has opened 60 new locations, including one “dark store” entirely devoted to filling online orders. Yet Whole Foods still controls just over 1% of the grocery market, according to research firm Numerator, compared with Walmart’s 19% and Kroger’s 9%."

"On the corporate side, Amazon centralized some operations, moving them from individual stores to Whole Foods’ Austin, Texas, headquarters. But it hasn’t become a conventional supermarket like some predicted. Whole Foods says rather than swapping out regional suppliers for bigger names, the company has added 3,000 local brands in the past five years, a 30% increase since before the Amazon deal."

•  "Whole Foods insists it’s committed to keeping products local and clean. Since the Amazon deal, Whole Foods told CNBC it’s more than doubled its list of banned food ingredients, bringing the total to more than 250. It prohibits things like hydrogenated fats, high fructose corn syrup and artificial sweeteners, and meat must be free of antibiotics and added hormones."

•  "For shoppers, the most visible change to stores is the technology inside the doors.

Customers can now enroll their palm print with Amazon One to pay without a card or phone. A device scans your palm, triggering a charge to your Amazon account. It’s available at more than 20 Whole Foods locations, with 65 more stores in California coming onboard soon."

•  "Amazon’s commitment to low prices didn’t align with Whole Foods’ image at the time of the acquisition, when the grocer was often called 'whole paycheck' and mocked for selling $6 asparagus-infused water.  An Amazon spokesperson told CNBC in a statement that its goal was to 'make high quality, organic foods more affordable and accessible for everyone,' and that it’s since 'lowered prices across aisles at Whole Foods Market, offered Prime Membership Discounts and Prime Member Deals in-stores'."

CNBC also points out that this is a significant week for Whole Foods - on Thursday, COO Jason Buechel succeeds co-founder John Mackey as CEO, the first time that the company has had someone other than Mackey at the helm.

KC's View:

Even five years after the acquisition, the Amazon-Whole Foods fit seems slightly off.  There are things about the combo I love - better discounts for Prime members, for example, and the ability to return any Amazon purchase to my local Whole Foods store - but it never feels like 1+1=3.

That's what I would've expected from such a combo.  We have a story below speculating that, 28 years into its existence, Amazon finally has reached Day 2 … at least in part because the company's complexity makes it less and less nimble with every passing day.  The culture clash between Amazon and Whole Foods has to be seen as part of that.

I'm not too worried about Mackey leaving, though … I just think that it'll be interesting to see what he says about the two companies on the way out.  He's already been insulting some of Whole Foods customers in the past few weeks, and once he's fully out the door, I suspect he'll be even less inhibited about it all.