Insider has learned that Whole Foods is raising prices. There is a change in strategy for the Amazon-owned grocery store.
The founder of a brand that sells its products at the grocery chain as well as brokers and consultants who advise food brands on their Whole Foods strategy have reported price increases over the last few months.
The people said that some of the increases added as much as a dollar or two to the on-the-shelf prices of products that sell for $20 or less.
Grocers often raise prices to protect their margins. The Insider spoke to people who said that the increases are more than they would expect from Whole Foods.
After several rounds of price cuts at Whole Foods, the prices have gone up. Whole Foods was meant to be less expensive.
Whole Foods has lost its reputation as a place for emerging brands to get started as a result of the price increases.
One grocery broker spoke with works with an upstart food brand that sells three varieties of its product at Whole Foods and saw prices go up on one variety but not the other two.
The broker said that Whole Foods has raised prices at some stores but not others in the same region. Whole Foods has always maintained the same pricing for each region.
Whole Foods didn't give a reason when they reached out to the company.
The broker asked if he could speak to the pricing team, but they wouldn't let him. There is no visibility.
Whole Foods did not reply to the request.
The founder of a brand that sells its products at Whole Foods has been affected by the price increases and spoke with Insider. When it comes to working with retailers, brokers act as advocates for food brands.
For fear of being retaliated against, one broker asked to be anonymous. Insider knows who the broker is.
Most brands have little control over how much their products sell for.
Retail sales prices can be suggested by brands. Retailers often differ from those. Retailers' own pricing strategy can be one of the reasons.
Insider spoke to a consultant who said that Whole Foods' recent price increases are larger than anticipated. The food-at- home prices have gone up in the last year.
Two companies she works with have seen price hikes at Whole Foods.
The distributor raised prices by 53 cents to make up for higher costs. The price went up on Whole Foods.
It makes sense for a retailer to raise their price when a distributor increases it. There is a discrepancy between the distributor and retailer.
A consulting sales director who works with small food businesses said that brands she works with have had to raise their prices just to cover their rising cost of goods
She is concerned that the price increases at the retail level have been much higher than that.
The brands are concerned about customers looking for cheaper alternatives or avoiding their products.
Many early stage brands get into Whole Foods expecting to attract new consumers and keep them buying. Whole Foods has been a place for emerging brands to grow their business.
She said that consumers don't know that the brand is raising the price. There is a negative feeling toward a brand that is increasing their shelf price.
According to Insider, prices at Whole Foods in Southern California went up this summer.
The price of her products was not going to be increased. She is watching the sales of her pasta to see if the higher prices at Whole Foods affect them.
She saidfall is peak season. The next few months will tell us if the impact will be large.
Whole Foods made a number of price cuts after it was acquired by Amazon.
The cuts are part of a cycle that will attract more business to Whole Foods, according to the company's CEO. Whole Foods was one of the most expensive grocery stores in the US.
Whole Foods may be learning to live with its "whole paycheck" image because of the higher prices.
Whole Foods' customer base is still affluent despite the price cuts. Amazon has opened about 40 Fresh stores over the past two years, each with a focus on low prices.
Half of Whole Foods customers have household incomes of $100,000 a year or more. Kroger has 39% of its customers have household incomes of $100,000 or more.
I think they're trying to figure out how much they can push and how much shoppers value the quality of the product. The person said, "Shrikhande."
Whole Foods is being weighed down by demand for delivery. A fee for delivery to Amazon Prime members has been added by the chain. Whole Foods' new CEO acknowledged that delivery is expensive.
They are trying to find a way to make up for those costs. Where is the person willing to spend a bit more? The person said, "Shrikhande."
According to a broker who has advised brands that were sold at Whole Foods before Amazon acquired the chain, the price increases have made it harder to sell at Whole Foods.
Whole Foods began charging brands a fee when it rearranged products on the shelf when it was acquired by Amazon.
The broker said that Whole Foods used to charge less fees. The regional staff was more open with brands about their choices.
The broker said that the climate at Whole Foods was related to the brand. You do not see that anymore.
The broker said that the changes were already being instigated by Amazon.
Are you employed at Whole Foods or have information to give? Alex Bitter can be reached at abitter@ Insider.com or via the Signal app.
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