By Owen Tucker-Smith

A new feature lurks in the backroom of a Whole Foods Market in suburban Philadelphia: the ShopBots, a group of robots that fetch Tide Pods and Pepsi for shoppers who aren't fully satisfied by Whole Foods's selection of organic kale and craft beer.

It's an experiment run by a team of Amazon and Whole Foods staff, who have strategized about how to get a wider range of groceries into the hands of customers without diluting a 45-year-old brand defined by its strict ingredient standards.

In the beverage section, shoppers face a selection of prebiotic sodas free of GMOs and artificial colors. But if they really just want a Pepsi, they can pull out their phone, open the Amazon app and ask. The ShopBots will spring into action. The soda will be ready to pick up in minutes.

In a separate trial in Chicago, the Pepsi is less hidden. There, Amazon has cleared the coffee shop and seating area of the city's flagship Whole Foods, installing in its place a 3,800-square-foot grocery kiosk called Amazon Grocery filled with brands like Kraft Mac & Cheese and Chips Ahoy. The hope is for shoppers to buy their cabbage at the Whole Foods upstairs before basking in the purple glow of Spicy Sweet Chili Doritos by the lobby.

The experiments are part of Amazon's push to shake up its natural-foods crown jewel, eight years after it bought Whole Foods for $13.7 billion. And after years of failing to meaningfully increase its sliver of the grocery business, the retail giant is throwing its considerable weight into the effort.

Amazon brought price cuts and new technology to Whole Foods following the sale, but left its corporate identity intact. That's changing. Amazon handed Whole Foods Chief Executive Jason Buechel responsibility over its entire grocery operation earlier this year, including its Amazon Fresh markets and Amazon Go cashierless convenience stores -- concepts that have struggled to gain traction. Whole Foods corporate staff, though not its store workers, officially become Amazon employees in December.

Staff were already on edge over the consolidation when a long-awaited round of layoffs hit Whole Foods Tuesday morning in Amazon's aggressive drive to cut costs and trim its corporate workforce. In an internal memo, Buechel tied the layoffs to the company's efforts to bring its grocery wings closer together.

"These changes are necessary to simplify the way we run the business across our grocery brands and allow us to invest more in delivering the best customer experience," Buechel wrote.

The integration of corporate employees won't affect the customer experience, a Whole Foods spokeswoman said.

The 2017 purchase had sparked worries among some employees and customers that Amazon would erode the culture that set the grocer apart. Meanwhile, rival grocery chains feared that Amazon was about to become a major supermarket player.

But eight years later, Amazon's market share in the grocery industry hasn't gone above 4%, according to market-research firm Numerator, which counts food and beverage sales but not alcohol and nonfood items. Whole Foods operates 547 stores worldwide and has 106,000 employees.

Whole Foods has strengthened its quality standards and culture since the acquisition, Buechel said in a statement. "Whole Foods Market has never wavered in its purpose: to nourish people and the planet by offering the highest quality natural and organic foods," he said.

The company hasn't said it plans to expand the experiments in suburban Philadelphia and Chicago, but said that it would "continue to iterate" on new concepts aimed at offering customers the chance to shop for both Whole Foods products and everyday essentials.

Amazon officials have said that blurring the lines between its grocery brands can help the company capture more of Americans' spending on food. Some employees and suppliers are wary.

"Whole Foods has great brand equity. It's been built up over decades," said John Foraker, CEO of Once Upon a Farm, which sells organic baby food and snack bars at Whole Foods. "If they were asking me, I'd say, 'Be super, super careful.'"

Changing of the guard

Whole Foods helped kick-start the modern natural foods movement when it made its debut in 1980. John Mackey, the company's co-founder and longtime CEO, helped build the regional chain into an empire by acquiring grocers around the country.

While its home base was in Texas, Whole Foods's operations were decentralized, with regional offices that catered to specific markets. Local foragers were hired to spot the next food fads. Stores lacked aisle numbers, because employees were expected to walk shoppers to their desired products while making conversation. Portions of budget surpluses were paid directly to staff.

By the 2010s, competition was rising. Walmart and Costco followed the lead of Whole Foods and were beefing up their own organic sections. Sales growth slowed, fueling a drop in its share price and boardroom discontent.

Mackey touched on the 2017 sale to Amazon on the "Habits and Hustle" podcast in October. He said that an activist investor had been threatening to take over the board and fire him and other executives, and a sale seemed like the best exit strategy. "We didn't want to sell to Amazon. It's just that Amazon was the best solution to a problem we had," he said.

Changes trickled in slowly. In 2018, the company laid off the in-store graphic artists who had given each location a unique aesthetic. Whole Foods also worked to centralize its operations and increase fees for suppliers. They reduced the number of local foragers. The company started to hire Amazon staff, and to offer a discount to shoppers enrolled in its Prime membership program.

Buechel, the son of a Wisconsin cheesemaker who had become Mackey's right-hand man, succeeded as CEO after Mackey's retirement in 2022.

Under his tenure, Whole Foods has seen year-over-year sales growth, according to the spokeswoman. In 2023, Whole Foods opened eight stores, according to a company document. Sprouts Farmers Market, seen internally as a fierce competitor, opened 30 stores that year.

The rest of Amazon's grocery business was doing worse. Amazon started moving into the industry in 2007 with Amazon Fresh, which started as a grocery delivery service and later opened physical stores. In 2023, the company halted the construction of new Amazon Fresh facilities, which were struggling.

In his recent podcast interview, Mackey addressed complaints from some shoppers about declines in the quality of Whole Foods's offerings. "It's not my problem any longer," he said. "I married my daughter off to the richest man in the world."

Amazonification

The integration between the two companies began ramping up last fall. In October 2024, Buechel faced a disgruntled staff in an all-hands meeting. He fielded questions about Amazon's policy that employees work in their offices five days a week that would also apply to Whole Foods.

Employees asked if ordering employees to drive into downtown Austin every day was in line with the company's sustainability goals. One executive suggested that staff carpool, according to people who attended the meeting.

In January, a slide in a presentation shown to some employees indicated that the company wanted to close a gap between Whole Foods's projected sales and revenue targets by leaning into new formats. "Leaked documents often paint an incomplete and misleading picture of our plans, and that's the case here," the company said.

That month, Buechel was promoted to run Amazon's grocery operation, a few months after Amazon's top grocery executive left the company.

Some analysts had crossed their fingers for a moment like this, irritated that the company had fallen far short of its plans to disrupt the grocery industry. Whole Foods says its sales have grown by more than 40% since Amazon's takeover, which works out to roughly 5% a year on average -- a far cry from its heyday in the early 2010s, when sales consistently grew in the double-digits.

"Broadly, it's been pretty underwhelming and not material to the Amazon stock story at all," Mizuho analyst Lloyd Walmsley said about Whole Foods.

Inside the company, signs of Amazon's encroachment didn't go over well.

Some staff complained that the company had become too metric-focused in the Amazon age; in-store shoppers would often rush through their shifts, employees said, trying to meet units-per-hour benchmarks.

"People are very aware of the Amazonification at Whole Foods," said Ben Lovett, 30, who works in the prepared foods and e-commerce departments of a Whole Foods in Philadelphia and who has spearheaded the company's first serious unionization push in years. "It's become numbers-based. Amazon has immense turnover. It seems to be part of their business strategy." Whole Foods said turnover across the company is lower than it's been in years.

Amazon's grocery staff recently tasked their Whole Foods counterparts with assisting them in developing a new iteration of Amazon Fresh, according to people involved in the effort. The store, in Orange County, Calif., would rely on Whole Foods's technology, systems and employment procedures, the people said.

Some Whole Foods staff felt they were being rushed by Amazon to roll out a project that didn't fully make sense to them, and weren't sure what kinds of products the store would sell. The store was initially slated to start operations in December but has been delayed, people familiar with the effort said. Store jobs that Whole Foods posted online last month were removed soon after.

The employee turmoil continued in June, when Whole Foods corporate employees were told they would become Amazon staffers. The status quo, Buechel said, wasn't working: He showed a presentation indicating the grocery division's processes were full of red tape.

In August, Amazon said it was rolling out same-day delivery for fresh groceries in 2,300 U.S. cities by the end of the year -- an effort overseen by Buechel. As part of that effort, the company created a program known as Project Fusion, according to people familiar with the matter, which entails Whole Foods workers fulfilling certain perishable orders placed on Amazon.com.

Since June, the grocery group's leaders have been working on a new structure for their sprawling division. The reorganization, according to a memo circulated on Wednesday, will involve some Whole Foods leaders taking on more Amazon projects.

Whole Foods corporate staffers will receive new job offers from Amazon in the coming weeks. Starting next year, they will no longer receive bonuses based on the chain's performance, and instead be awarded Amazon stock, according to an internal memo. Corporate employees will lose their longtime 20% Whole Foods in-store discount after a year.

In meetings throughout the year, staff have been asking how the integration will affect the brand. Current and former employees said Whole Foods -- and its owner -- have a decision to make: Should it take a big swing at expanding its customer base, even if it risks alienating the longtime loyalists?

Dina Stretiner, a 34-year-old data scientist in Denver, still remembers stepping into a Whole Foods for the first time in 2013 and witnessing its "restaurant-quality" prepared-foods section, with minestrone soup and falafel that blew her away.

After the Covid-19 pandemic, Stretiner said she noticed a decline in quality of the prepared foods. She wouldn't want to see Pepsi at a Whole Foods.

"That's not something I buy. It definitely turns me off," she said. The new prepared-foods section, she added, "is almost like buying gas-station food."

On a visit to the Chicago store, Virginia Lee, a food-industry market researcher, watched customers descend the Whole Foods escalator, grabbing a Red Bull at Amazon Grocery on their way out. She thought it seemed like a smart business decision.

"Why let all those food dollars go out the door?" she said. "We already have these people in the building. Let's try to grab the dollars for these less healthy purchases."

To assist confused loyalists, the grocer has pasted a small sign by the entryway, adorned with the company logo and, in Whole Foods's signature deep-green text, a reminder to passersby: "We're Still Here!"

Write to Owen Tucker-Smith at Owen.Tucker-Smith@wsj.com

(END) Dow Jones Newswires

November 01, 2025 21:00 ET (01:00 GMT)

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