By Michael Elkins
A Wall Street Journal exclusive story on Monday reports that Amazon’s (NASDAQ:AMZN) Whole Foods Market is exploring building commercial kitchens. According to people familiar with the matter, the kitchens would make prepared meals for the grocer’s food bars and refrigerated cases.
During the pandemic, Whole Foods and other food retailers closed self-serve food bars and eateries because of concerns about potential crowding and contamination, instead selling boxed meals or having store employees serve food. Supermarket operators have since reopened their buffets, and sales have rebounded as workers have returned to offices. Since the start of the year, sales of prepared meals at grocery stores are more than 30% higher than 2019’s level, according to data from Circana Group LP.
The move to open kitchens is a shift for the supermarket operator, which has outsourced much of its food production to other companies after Whole Foods announced in early 2017 that it was closing three commercial kitchens, part of a broader effort to streamline operations and cut costs before Amazon acquired the company later that year.
Jeff Turnas, senior vice president of global culinary at Whole Foods, said the company is constantly evaluating ways to produce food, including operating its own facilities, working with third parties and using in-store kitchens. The company has bakehouses in Colorado and Florida.
The COVID-19 pandemic prompted Whole Foods to rethink what it sells, Mr. Turnas said. Supermarket chains have been adding more prepackaged-meal options for shoppers, and Mr. Turnas said Whole Foods plans to expand its offerings of sushi, sheet cakes and juice bars in the coming months.
Shares of AMZN are down 0.60% in pre-market trading on Monday.