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Whole Foods hosts supplier summit to ease tensions

Grocer discusses loyalty program and new buying process

Whole Foods held a summit on Tuesday with its largest suppliers to ease their concerns over recent fee increases and to outline its Amazon Prime loyalty program, according to Fortune.

During the meeting, the organic grocery chain outlined how loyalty members will benefit from shopping popular items and receive additional savings each week on sale items. "Whole Foods stressed to its suppliers that buying into the new program was a way for them to grow," said Fortune.

Vendors have criticized the Austin, Texas-based grocer for not properly communicating changes it made to merchandising and in-store marketing fees and feel the changes have been prompted by new owner Amazon.

Before the meeting with suppliers, A.C. Gallo, Whole Foods president and COO, told Fortune that selling products to the grocer had grown complicated, according to suppliers, and the new system would streamline this process and benefit both small and large suppliers.

Large, national suppliers will deal only with the grocer's global team in Austin, freeing up buyers in local markets to scout new products for their stores, Gallo said. Prior to the change, suppliers had to meet with the global team and then regional managers.

Though some of these changes were set in motion prior to Amazon’s $13.7-billion purchase of Whole Foods, the acquisition has opened the grocery chain to new criticism.

The meeting with vendors was held days before The Wall Street Journal reported that more than a dozen senior-level executives and managers have left the organic grocery chain since it was acquired by Amazon last summer.

"People who have left include leaders of the bakery, produce, sustainability and local-foods divisions" -- many of whom balked at having to report to young tech execs in Seattle.

Sources told The Wall Street Journal that executives felt Amazon kept them in the dark on the company's plans for the grocer and how it planned on fixing a laundry list of issues.

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