Thursday, June 29, 2017
Amazon.com Inc. is considering introducing new retail banners to the market once its takeover of high-end grocer Whole Foods Market Inc. is complete.
Whole Foods co-founder and CEO, John Mackey (pictured), made the remarks in a securities filing earlier this week, in which he said the retailer might launch another brand with different standards, according to a Reuters report.
Mackey noted that once Amazon takes over, it plans to keep the natural grocer's high standards: "They’re not stupid enough to go change that," he said in the filing, which contained a transcript of a town hall meeting for Whole Foods employees.
During the town hall meeting, Mackey said that, over time, there could be other formats that evolve that might not be branded as Whole Foods Market, and "potentially, wouldn't be our standards."
The remarks offered a preview into how e-commerce giant Amazon might turn around the sluggish sales of Whole Foods since announcing earlier this month that it would buy the company for US$13.7 billion.
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.
Mackey said Amazon's technology will help the grocer transform from "class dunce" into "valedictorian." Amazon, which made a splash last year with a checkout-free grocery store, has said it has no plans to automate the jobs of Whole Foods cashiers.