Too Close to See: Why Amazon’s Handling of Whole Foods Could Lead to Crisis

It’s a common occurrence for a crisis management pro – you’re brought into a case, start asking questions, and immediately spot red flags so blatant it seems impossible they were missed. Yet, more often than not, there’s no willful ignorance at work. In this new monthly series we’ll look at organizations who are simply “Too Close to See” the crises they’re steering right into.

Clashes between expectation and reality spark crises. After Whole Foods was acquired by Amazon, CEO John Mackey promised “to support and promote local products and suppliers.” After all, one big reason shoppers head to Whole Foods over other groceries is to find an eclectic selection of locally sourced items. Here’s the issue – since that promise from Mackey there’s been a series of changes in Whole Foods operations that appear to directly contradict this promise, and people are taking notice. Here are some examples:

  1. Whole Foods formerly operated each location like an independent grocer, with area staff members responsible for tracking down local goods. Now execs at the company’s home office do the shopping.
  2. Local food producers were formerly welcomed into the store to give demos and forge relationships with shoppers. Now vendors must pay to do demos, and they can’t deliver those demos themselves. Instead Whole Foods is utilizing the same demo company used by Walmart.
  3. Whole Foods has raised the fees they ask to restock shelves and run promotions to above what many rival chains charge. Now many small artisan suppliers are priced out of Whole Foods stores altogether.

Articles like Eater.com’s “Amazon is Sort of Ruining Whole Foods” have sparked widespread criticism of the brand on social media. And now, with rumblings of unionization among some Whole Foods employees being reported, another challenge rears its head. Amazon is notoriously anti-union, and isn’t likely to play nice with anyone organization such an effort. Though many large companies prefer to avoid unions if they can, how will aggressive measures to stop unionization look coming from the Whole Foods brand which cites “team member growth and happiness” as one of its core values?

If Amazon is purely focused on utilizing Whole Food’s physical locations as a conduit for Prime as some have predicted then they may not care about the clashes their business decisions are creating. If they want to maintain Whole Foods as the brand it once was, then the confident public claims that they are working to keep the company’s core values intact need to be backed up by action or it’s only a matter of time until the reputation woes translate into financial pain.

Erik Bernstein
erik@bernsteincrisismanagement.com
www.bernsteincrisismanagement.com

Connect with Erik on LinkedIn!

 

 

Leave a Reply

Your email address will not be published. Required fields are marked *