AUSTIN, TX - Since being acquired by Amazon in early last year, Whole Foods has been attempting to reshape its vendor policy, to realize synergies with its parent and new efficiencies brought about by scale and remain true to a brand identity that is deeply tied to the retailer’s relationship to small scale vendors.
The company even convened a summit for small scale vendors to vent concerns over changes in vendor policy and reach consensus on what a mutually beneficial vendor relationship between the retailer and its suppliers would look like earlier this year. But a report by The New Food Economy suggests that, despite inroads made by smaller vendors, Whole Foods may be passing the cost of its recently rolled out Prime price cuts on to its suppliers.
The New Food Economy’s reports that Whole Foods is planning to implement a 10 percent “scanback charge” for products on sale through the company’s Prime Savings Program.
An internal email obtained by the news source outlines the new charge—describing a scheme in which, when a customer purchases a sale item, the extra 10 percent offered to Prime customers will mandatorily be charged back to the vendor—potentially compounding the hit the that vendors take on sale priced items.
And while The New Food Economy notes that promotional pricing is a key tool for many vendors attempting to grow their brands, Whole Foods has, so far, provided no information on how many shoppers will be taking advantage of its new discount program and how new scanback charges are anticipated to affect sales.
To read the news source’s report in its entirety, click here.
How will Whole Foods attempts to remake its pricing and vendor policies affect fresh produce? AndNowUKnow will continue to report with updates.
