Reports in the Washington Post and other US media have revealed that Whole Foods Market has begun to charge suppliers for in-store services such as promotional displays and demos.
An email from the natural food retailer to suppliers seen by the Washington Post shows that it is also requiring that suppliers work exclusively with a single centralized brokerage firm – for product demos, setting up displays and checking shelf conditions – rather than being able to make arrangements at the local store level.
The Post reports that suppliers that sell more than $300,000 of goods annually to Whole Foods will be asked to discount their prices – by 3% in the case of grocery, and 5% for health and beauty products – to fund the programme. Suppliers will also reportedly have to pay charges for each four-hour product demo (at $165 for national suppliers and $110 for local businesses).
The changes in policy have alarmed some smaller natural and organic brands who fear that they could be squeezed out as part of the ‘conventionalization’ of Whole Foods by new owner Amazon.
But Whole Foods says that the changes to it supplier processes are bringing immediate benefits. Don Clark, general vice president of purchasing for nonperishables, said in a statement: “The changes to our in-store execution and demo programs are creating a consistent, high-quality experience that benefits both our suppliers and our customers.”
11 hours ago