Reuters writes about speculation that once Amazon "completes its takeover of high-end grocer Whole Foods Market, it might launch another brand with different standards."
The speculation was prompted by a statement that Whole Foods CEO John Mackey made in a town hall meeting with employees, when he said, "Over time, there could be other formats that evolve that - that might - wouldn't be branded Whole Foods Market, potentially, wouldn't be our standards."
According to Reuters, "The remarks offered a preview into how e-commerce giant Amazon might turn around the sluggish sales of Whole Foods since announcing on Friday it would buy the company for $13.7 billion, including debt. Industry observers have said that Amazon may add a selection of discounted, non-organic food to distance the chain from its 'Whole Paycheck' nickname.
"Whole Foods already has a separate store, called 365, which offers private-label goods and lower prices than its typical formats. The company has needed to tread a fine line between introducing more conventional and affordable products, while maintaining the allure of a premium brand."
The speculation was prompted by a statement that Whole Foods CEO John Mackey made in a town hall meeting with employees, when he said, "Over time, there could be other formats that evolve that - that might - wouldn't be branded Whole Foods Market, potentially, wouldn't be our standards."
According to Reuters, "The remarks offered a preview into how e-commerce giant Amazon might turn around the sluggish sales of Whole Foods since announcing on Friday it would buy the company for $13.7 billion, including debt. Industry observers have said that Amazon may add a selection of discounted, non-organic food to distance the chain from its 'Whole Paycheck' nickname.
"Whole Foods already has a separate store, called 365, which offers private-label goods and lower prices than its typical formats. The company has needed to tread a fine line between introducing more conventional and affordable products, while maintaining the allure of a premium brand."
- KC's View:
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At some level, I do think we all have to take a deep breath. Whole Foods hasn't proven that it can run multiple formats yet, and so I'm not sure Amazon is suddenly going to start producing Whole Foods spinoffs.
I do think they can make the 365 format work, though - since it always has been intended to a) appeal to millennials, b) do a better job integrating technology, and c) creating a lower-priced image. Amazon is really, really good at these three things, and I don't think Whole Foods is. This could be a big opportunity.
