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Tuesday June 23, 2020 |Notes

Whole Foods quality, price, and value

There was a time when Whole Foods was viewed as a high-end grocery store where the quality was unquestionably superb and the prices were commensurately high. Since Amazon purchased the company in 2017, Whole Foods has changed to offer much lower prices and the quality of food has suffered as a result.

It's difficult to measure quality over time, particularly when the factors going into any measurement change drastically (i.e. number of customers, distribution, manufacturer, etc). There is anecdotal evidence that the quality has degraded. Foodies no longer rave over discoveries at Whole Foods, the company's own 365 brand dominates shelf space, and many of the company's original customers have questioned Amazon's commitment to quality over quantity.

At the same time, Whole Foods has gotten away from the moniker Whole Paycheck, a nickname attributed to the high prices once prevalent in their stores. Perhaps it shouldn't be surprising that the quality has decreased, given the drastic decrease in prices.

From this perspective, there's a strong likelihood that the value has actually increased for most consumers. This is typical of how Amazon has acted in other markets, where brands are less important than value. Margin has always been seen an opportunity by Bezos and it's no different with Whole Foods.