The Wall Street Journal reports that Whole Foods, "which has long given its local managers and regional bosses broad discretion over everything from buying cheese to store design, is whittling away at some of that autonomy in an effort to reduce costs and boost its clout with suppliers. As stiffer competition erodes its profit growth, the natural and organic foods retailer is tweaking its management style by centralizing and streamlining some functions. The changes could be risky for the company as it tries to wring more efficiency from its stores without sacrificing the local flavor and specialty offerings that have been a cornerstone of its success."
This includes "shifting more responsibility for buying packaged foods, detergents and other nonperishable items for the more than 430 stores to its Austin, Texas, headquarters. It is deploying software to simplify labor-intensive tasks like scheduling staff and replenishing shelves.
The chain also is seeking to save about $300 million a year by September 2017, partly by eliminating more than 2,000 jobs, a plan it announced last fall."
This includes "shifting more responsibility for buying packaged foods, detergents and other nonperishable items for the more than 430 stores to its Austin, Texas, headquarters. It is deploying software to simplify labor-intensive tasks like scheduling staff and replenishing shelves.
The chain also is seeking to save about $300 million a year by September 2017, partly by eliminating more than 2,000 jobs, a plan it announced last fall."
- KC's View:
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It isn't an absolute, but I tend to believe that centralizing buying and scheduling tasks puts the emphasis on efficiency rather than effectiveness ... and this could end up being an enormous problem for Whole Foods. It can result in a disconnect between the store and the shopper. It may be good short term for company results, it may satisfy the investor class, but will it make the Whole Foods in my town - 1800 miles from company headquarters in Austin - a better, more responsive store?
I am dubious.
