Yes, why believe articles? Well Whole Foods in an invested company and to attract those to invest must share information. Great article below explains very easy why Whole Foods cutting labor will result in making money and turning it into a powerhouse. Prevail the new WholeMart. Less customer service and minimally skilled employees that only need to learn how to stock shelf or cut open a bag of already cooked quinoa. From just team members to leaders to even Regional, all will be cut down to minimal. So quick fighting and blaming each other...
If you don't like Whole Foods turning into WholeMart then find something fresh and appealing to you!
4/06/2016 article from www.specialtyfood.com
Whole Foods Outlines Move From Regional to Centralized Buying
At a packed meeting with suppliers at Natural Products Expo West 2016, Whole Foods Global Vice President of Purchasing for Non-perishables Don J. Clark outlined the broad strokes of changes at Whole Foods as increased competition from Target, Walmart, Kroger, and Costco has led to a 40 percent loss in stock value over the past year.
For the first time since co-CEO John Mackey co-founded the natural and organic retailer in Austin in 1980, Whole Foods will move from regional to centralized buying of non-perishables, and offer customized promotions, including digital coupons. Furthermore, the company is undertaking a sizeable upgrade in technology, replacing an assortment of check-out software programs, some inherited in acquisitions, and installing a centralized replenishment program.
“These changes all make perfect sense. The real issue is how Whole Foods will still maintain the innovation it’s known for with the greater centralization in Austin and fewer decision-makers. That’s really the $64 million question,” said Tim Sperry, a natural-products industry consultant who worked for Whole Foods for 20 years as regional buyer.
Until this spring, buyers in the 11 Whole Foods regions were responsible for buying, setting prices, and maintaining profit margins for non-perishables. While this system fostered creativity and strong regional and local product assortments, many producers experienced frustration at the number of contacts involved, and a difficulty in getting things done, industry analysts report.
Over the next one to two years, Whole Foods will move towards centralizing buying in Austin with a Category Management approach to buying and regular trade promotions. A test of this system is beginning in the Rocky Mountain and Northern California Regions. Several years ago, Whole Foods initiated centralized buying of much meat and produce, similarly phasing-in after testing the new approach regionally.
Several details will be worked out as Whole Foods begins to get results from the test. For example, suppliers who sell in only a few of the regional markets may continue to work directly with the regional contacts, but does that apply to producers who sell in three, two, or only one market? Each chain will still have a percentage of local, or regional, products, but is that percentage closer to 35 percent or 15 percent?
“These changes will be helpful to suppliers at Whole Foods. With the old system you had to make presentations and maintain contacts with 11 different buyers,” said Jack Acree, executive vice president of Saffron Road Foods, a national brand with Whole Foods since August 2010. “You could make a promotional deal in Austin, and some regions or stores would give the deal, but you wouldn’t necessarily get the price reflected across the country. Compliance was well below 100 percent. Now, they’re expecting 95 percent compliance, which would be a huge win for manufacturers. A key challenge they will face is continuing to champion new brands and working with smaller regional manufacturers and distributors to make sure they stay the innovation leader.”
On the tech side, until recently, employees had to scan each item’s shelf tag to reorder stock. The new system, similar to those currently used by Whole Foods’ competitors, will provide up-to-date stocking information and automatically replenish many items. The center aisle products will fall into one of three categories: Win, products where Whole Foods wants to lead in a category in innovation and uniqueness; Parity, more broad-based items also carried by competitors and for which Whole Foods wants to have the right price; and Staples, regular, household goods, a category that may be scaled back.
With its Q1 performance announcement in February, Whole Foods offered its first-ever digital coupons nationwide, available through its rewards program app. The chain test-marketed the coupons, including $5 off any $15 purchase of Fresh Produce, as well as other dairy and grocery items, in Philadelphia and Southern New Jersey.
Not discussed at the meeting were the recent exits of several key people from the Global team in Austin, including Errol Schweizer, formerly Executive Global Grocery Coordinator (Vice President/Grocery), and the senior regional grocery director for the Northeast region, Kara Rubin. At Whole Foods since 2002, Schweizer won awards and industry recognition for keeping Whole Foods at the forefront of trends including new superfoods, non-GMO transparency and animal welfare, and working with local producers on sourcing natural and organic ingredients and developing products.
One evening during the Natural Products Expo West 2016, Schweizer was given a standing ovation by several dozen industry professionals when he entered the restaurant where they were eating. (Gabbi's Mexican Kitchen) Schweizer declined to comment for this article.
A Whole Foods spokesperson declined a request to interview Clark. At the presentation, however, Clark predicted these changes would lower operational costs and lead to greater efficiency, driving sales growth, while not undermining Whole Foods’ core identity, trademarked as “America’s Healthiest Grocery Store.” Whole Foods’ lowered stock value and slowed comparable store sales led to its announcement in the fall that it would lay off 1,500 workers, or 1.6% of its workforce. The chain is investing in 365, a chain of lower-cost, smaller stores, targeted at younger shoppers. According to Whole Foods’ latest quarter report, the chain will open 365-branded stores in Silver Lake, Calif., in late May; Lake Oswego, Ore., in July; and Bellevue, Wash., in August. With 431 stores currently in the United States and the United Kingdom, Whole Foods plans to eventually have 1,200 stores in the U.S.
“I think three years from now, it’s going to be fine,” predicted Sperry. “At first vendors will be confused, but within two years, a lot of this will be in place. Now they will be able to go to Austin and get a yes or no. Whole Foods will need to have the right people working with the right kind of suppliers in place to build those brands in which it leads. It’s going to take time.”
Whole Foods’ next financial reporting is scheduled for May 4.