Will a new buying strategy at Whole Foods limit the number of products it sells?

Dive Brief:

  • Whole Foods is in the process of transitioning its product buying practices from pure autonomy in the store's 11 regions to a hybrid model that move some of that control to category managers in corporate headquarters, according to an article in Fast Company.

  • Under the new model, national brands would deal with national category managers. Local brands would work with local buyers, acting under the guidance of national managers. The national managers would make final decisions on which products to include on the store's shelves.

  • The store is changing its strategy to meet increasing competition for customers and vendors. Under the old model, it was more difficult for a brand to get national distribution at Whole Foods than other chains, like Target.

Dive Insight:

From a retailing perspective, the decision to choose or effectively lock out a start-up company is a rational decision. But is it a good idea?

This is hardly a new issue. Stew Leonard's supermarkets “locked out” hundreds of food producers and packers for decades, by limiting the items-available count to something close to 1,000 – as opposed to the typical supermarket's 38-000-50,000 or more. So has Trader Joe's, by private-labeling its offerings. 

Whether more or less total products are better can be argued either way. What should not be arguable is a store's right to sell what it wants, at the exclusion of a particular class of suppliers.

The history of laws and regulations on who can do what in the retail (and wholesale) market place is long and complicated. But since 1890, when the Sherman (Antitrust) Act was passed by Congress – with two successive, more restrictive refinements – in place, lawyers have spent many days debating minutia far too intricate for the average shopper to understand, or, in a practical sense, be concerned with. But that shopper is affected by, and indirectly concerned with, food stores' practices that may unreasonably limit choices.

Filed Under: Grocery Marketing