Whole Foods Seeks to Calm Key Vendors with Upcoming Meeting After Tensions Build

Whole Foods Seeks to Calm Key Vendors with Upcoming Meeting After Tensions Build

AUSTIN, TX - Whole Foods is reportedly looking to make nice with key vendors, as, according to CNBC, the company has invited them to a summit on March 19th. News of this comes in the wake of recent reports that tensions are rising between the retailer and important brands sold in its stores.

The news outlet reported that the retailer is looking to reassure brands that their relationships with Whole Foods are stable after its sale to Amazon, and invites were sent out via email last Saturday. CNBC noted that relationships have grown tense in the last few months due to the shift from its previous focus on local to its pursuit of a more nationally-recognized orientation, and this has vendors’ fearing that the company is moving in a direction that sacrifices the selection and relations that make it stand out from other retailers. While not all of the changes have come in the wake of Amazon’s takeover, the change in command has been attributed to much of the scrutiny-inducing shifts, which we have been reporting along the way.

Whole Foods storefront

One of the steps the retailer is taking during the transition is its recently proposed servicing fee, which will charge for the company’s displaying efforts that will centralize vendors’ products. Brokers have helped food companies navigate what has been called “the most expensive mileage on the planet,” according to CNBC, as they make their way from the stock room to the shelves in retail chains like Whole Foods. Brokers’ roles include tending to products’ display and care, establishing more shelf-space for certain products.

The company reportedly now seeks to control the entire broker-side of the process, charging between three and five percent of sales for some companies, the Washington Post reported, and vendors are upset over the hike in fees and stress in their relationships with their brokers. With the jump in fees for Whole Foods, companies have less funds and product to work with their brokers. This monopolizes the merchandising process and the information flowing between the vendors and the stores, offering Whole Foods the entirety of the data it collects since brokers will be cut out of the conversation, the source explained.

Will Whole Foods be able to calm vendors as they wade their way through the retailer’s onslaught of changes, and how will the meeting’s aftermath relay into the rest of the industry? With the summit right around the corner, look to AndNowUKnow to keep you updated with the latest ripples Whole Foods makes on our industry.

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