Commentary

Whole Foods Boosts Amazon Online But There's Trouble In The Aisles

The good news for Amazon is that its Whole Foods acquisition has boosted its online grocery sales. The bad news is that some stores have been lean on some products and produce since the transition and both shoppers and employees are fed up about it, although it now appears the problem may not be of Amazon’s making.

“In 2017, Amazon earned 18% of U.S. online grocery sales, valued at $2 billion, according to Sandy, Utah-based ecommerce solutions firm One Click Retail’s latest report, ‘Amazon Grocery 2017 Review,’” Progressive Grocer reports. And “Whole Foods Market's 365 Everyday Value brand consistently held the No. 2 spot among the retailer's bestselling private labels (AmazonBasics held first place), earning an estimated $11 million in sales between late August, when it began selling through Amazon, and the end of the year.”

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Business Insider’s Hayley Petersen, meanwhile, has been leading the reporting on the shortages on the shelves, starting with a piece early last month.

“In interviews with Business Insider and in social-media posts, dozens of shoppers have complained about finding bruised, discolored, tasteless, and rotten produce in Whole Foods stores from California to New York over the past couple of months,” Petersen wrote on Dec. 7. “Shoppers have also reported out-of-stock issues, saying it's impossible to find items that they've been buying at Whole Foods for years, such as frisée, loose carrots, and Brussels sprouts. Several said fruits and vegetables such as avocados are spoiling faster than usual.”

Then, last week, Petersen cited a Barclays research note published last week that confirmed the problems, saying the “out-of-stock issues could be a positive sign for Whole Foods, indicating higher shopper traffic. But the issues are also indicative of lost sales.”

Barclays, to be sure, also had been on Amazon’s case before that. 

After reading and quoting from Petersen’s first piece last month, Observer.com's John Bonazzo got his hands on a Barclay’s analysis “that noted many of the same issues. Barclays analysts visited several northeast Whole Foods on November 20 (the Monday before Thanksgiving) and made some troubling observations,” he writes.

“One of Barclays’ main complaints was that there were boxes thrown around the store — some of them were blocking aisles, and one even blocked the seafood counter.”

Yesterday, based on not-for-attribution discussions with seven Whole Foods employees, ranging from cashiers to managers, Petersen reported that “the problems began before the acquisition. They blame the shortages on a buying system called order-to-shelf that Whole Foods implemented across its stores early last year.”

As good as the system may sound on paper, the execution has been troublesome, as Petersen details, and it has led to widespread morale problems.

Inc.’s “Absurdly Driven” columnist Chris Matyszczyk observes that technology has a way to go before it really understands quixotic human beings — particularly, the way they shop.

“It sounds as if this is a classic use of technology to create efficiency. Yet human beings aren’t (yet) machines. They behave in sporadic, irrational, quite potty ways at times. Suddenly, there will be a communal craving for organic iceberg lettuce from Finland for no good reason whatsoever,” Matyszczyk writes.

“The technology isn't ready for that and the consequence is a denuded produce department. Whole aisles are now Whole Foods deserts.”

Nice quip, but it may be going a bit too far.

Pounding the pavement, the San Francisco Chronicle’s Jenna Lyons found some shoppers who were having problems getting their staples. Karma Quick-Panwala, for example, “walked out of a San Francisco Whole Foods on Thursday without the family’s go-to milk brand. Her husband drinks chai milk just about every morning, she said, and uses milk from the Straus Family Creamery to make it.” Isabelle Beekman noticed a shortage of Clover Milk after Christmas, and spinach has been spotty. Russell Kowick, who has been shopping for others as an Instacart employee for a week, tells his customers to forget about zucchinis or cucumbers.

But all-in-all, Lyons said, the “shelves seemed normally stocked” at the three San Francisco locations she checked out.

“One store leader at Franklin Street, who said employees were not authorized to speak, said that the shortage seemed to mainly affect East Coast locations,” she writes.

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