More than a dozen executives and senior managers have left Whole Foods since Amazon acquired the grocer in June 2017, according to former employees and recruiters in a report from The Wall Street Journal. The leadership shakeup includes departures in the bakery, produce, sustainability and local foods divisions.
Some veterans exited the company despite requests that they stay, while others say they were pushed out after Amazon announced the acquisition but before the deal was closed. Top managers disapprove of reporting to younger Amazon executives, according to the report. Additionally, they feel the e-Commerce giant is failing to adequately explain its plans to integrate the supermarket chain into its business.
John Mackey, CEO and Co-Founder of Whole Foods, and Steve Kessel, SVP of Corporate Affairs at Amazon, have praised the success of the merger, but others have expressed concerns with initiatives such as the centralization of in-store merchandise handling. Suppliers previously worked with regional offices or even individual Whole Foods locations, but the retailer has named SAS Retail Services, a division of Daymon, as its single provider of in-store merchandising services to exert more control over operations.
Critics of the change worry Whole Foods will become more homogenized, losing the variety of niche brands that help it stand apart from competitors at a time when consumers are increasingly interested in local options. Approximately 64% of independent grocery store shoppers are very or extremely satisfied with their local supermarket, according to the 2018 National Grocery Shoppers Survey.
Advertisement
Additionally, select consumers reported instances of inventory shortages at Whole Foods locations since the acquisition, which damaged employee morale in some instances. Managers may be unhappy with the way inventory management problems affect both customers and employees, especially as e-Commerce operations grow.
Other concerns derive from programs that were started before Amazon took over. The grocery retailer already planned to increase the fees suppliers pay to have their products stocked, which could cause them to raise prices or defect to other retailers. Whole Foods invited 200 top suppliers to meet at its headquarters this week where they discussed the operational changes.
At the request of the Amazon Corporate Communications team, RTP has included full statements from Steve Kessel, SVP for Amazon, and John Mackey, Co-Founder and CEO of Whole Foods Market.
“At our core, we both share a commitment to a great customer experience,” said Steve Kessel, SVP for Amazon. “We are just months into our integration with Whole Foods Market and it’s going incredibly well. In this short period of time, we’ve partnered to bring several new benefits and services to customers— lower prices, fast delivery through Prime Now, a credit card with rewards, and more. We are off to a great start, and look forward to many years of future success together.”
