If you used to really like Whole Foods, stay tuned. Because 18 months after its $13.5 billion acquisition by Amazon, and after a lot of incremental rollouts and experiments, it seems things are about to start changing big-time.

The clues are in a report from The Wall Street Journal that says Amazon has been scouting locations for bigger Whole Foods stores in states and regions where they don't currently have any stores at all--places like Idaho, south­ern Utah and Wyoming, along with many other suburban areas.

It all marks an evolution for the chain from its trendy, mostly urban health store roots, to what seems like it could become a hybrid grocery store and warehouse strategy for Amazon Prime.

Neither Amazon nor Whole Foods is providing details on the record apparently, regarding where they're going or how many stores they plan to open.

And, it's always worth being a bit skeptical about anonymously sourced articles about corporate intentions. We don't know the Journal's source(s)--described only as "people familiar with the plans."

However, it's worth nothing that one of the reporters on the story is Laura Stevens, who also was part of the team of Journal writers who broke the news that Amazon planned to split its HQ2 second headquarters between New York City and a Virginia suburb of Washington DC.

In other words, she got that right, so I'd be willing to bet she has some good sources.

Whoever they are, they're apparently also saying that while Whole Foods has seen a lot more revenue since Amazon took over, its profit margins have been hurt as a result of all the discounts that Amazon offers via Prime.

And Prime is apparently big part of what's pushing Amazon to expand like this.

Those slightly larger stores they're looking at? They're 45,000-square feet or so, and the extra space is intended "to accommodate Amazon delivery and pickup from online orders," according to the Journal:

Amazon offers Prime Now, a two-hour delivery option to members of its Prime subscription service in more than 60 cities, and online grocery pickup from Whole Foods stores in as little as 30 minutes from nearly 30 cities. 

Amazon plans to expand those services to nearly all of its roughly 475 Whole Foods stores in the U.S., according to another person familiar with the plans. Amazon also wants to use benefits for Prime members to attract new customers to Whole Foods and draw them back more often.

Regardless of how it plays out, it seems the expansion plans will mark a rebound from slower store growth and layoffs that Whole Foods endured during the last few years.

That's probably good news for Amazon, for the people who work at Whole Foods (its employees are now making at least $15 an hour and are eligible for stock grants according to the Journal), and for customers who like having their groceries delivered quickly.

If you're an old school customer from way back, whose affinity for Whole Foods came from how it made you feel about your choices years ago? 

The jury's out on what you'll think about the changes. But one way or another, it looks like they're coming.

Published on: Jan 1, 2019
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