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Whole Foods is changing the way it does business with suppliers, and some local and regional brands say it's having a crippling impact on their business.
The grocery chain is charging brands more money for prime shelf space and in-store product demonstrations and taste tests while also requiring them to pay ongoing fees to third-party companies for food-safety audits and photographs of their products.
Foods - Guidelines - Stores - Orders - Cases
Whole Foods has also dropped minimum-shipment guidelines that prevented stores from making tiny orders of just one or two cases of goods and stopped paying shipping fees for some goods, according to a company email on the changes. Several suppliers told Business Insider that they were losing money on shipments as a result. Two suppliers said they had refused to fill orders when shipping costs exceeded the cost of their goods.
The changes are part of an effort by Whole Foods to cut costs and streamline product merchandising across its stores. But they are leading to confusion and unrest among some of Whole Foods' suppliers, according to interviews with eight vendors and two brokers who collectively represent more than a dozen other brands. Some are considering cutting ties with Whole Foods as a result.
Employees - Customers - Vendors - Whole - Foods
"They have pissed off their employees, they have pissed off customers, and they have pissed off their vendors," said a Whole Foods vendor of eight years who asked to remain anonymous for fear of retribution. "From a financial perspective, we can only take so much abuse before we say this just isn’t working for us anymore."
Whole Foods spokeswoman Brooke Buchanan did not respond to requests for comment.
Rules - Whole - Foods - Requirement - Suppliers
Among the new rules at Whole Foods is a requirement that suppliers selling the grocer more than $300,000 of goods annually must discount their products by 3% to 5%, a change first reported by The Washington Post. Brands...
(Excerpt) Read more at: MSN
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