Whole Foods CEO bets on smaller stores and the latest Amazon tech to win over shoppers

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Whole Foods received some rare praise on an Amazon ( AMZN ) earnings call dominated by talk about AI, Amazon Web Services, and some more AI.

"If you look at the growth in geographies that Whole Foods Markets are in, they're significantly outpacing the growth of comparable grocers, and the profit trajectory continues to trend the right way as well," Amazon CEO Andy Jassy told analysts. "We found a new format there in Daily Shop in urban settings. It's off to an amazing start that we're expanding very rapidly."

The business appears to be doing well during a period in which competing grocers, such as Walmart ( WMT ), Target ( TGT ), and Kroger ( KR ), are locked in price wars and the US consumer continues to navigate food inflation.

Second quarter sales in Amazon's physical stores segment — which is mostly Whole Foods' nearly 540 stores — grew 4% from the prior year. The company is aggressively opening up new locations, especially smaller sites in urban areas that offer more grab-and-go foods.

It's also investing in technology to enhance the shopping experience.

At the helm of Whole Foods is CEO Jason Buechel. He joined the company in 2013 as chief information officer, where he spearheaded the grocery chain's digital infrastructure, e-commerce, and delivery capabilities before rising to COO.

When Whole Foods co-founder John Mackey retired in September 2022, he handpicked Buechel as his successor. Buechel was recently promoted to vice president of Amazon Worldwide Grocery Stores, placing him in charge of unifying Whole Foods, Amazon Fresh, and Amazon Go under a cohesive retail strategy.

"Having the opportunity to work side by side with John Mackey over those 11 months was also a great learning experience," Buechel said in a new episode of the Power Players With Brian Sozzi podcast (video above, listen below).

"At the same time, a big thing that I did was something we called the Whole Conversations Tour, where I went out and visited with each one of our regions and connected with suppliers, customers, community members, all of our stakeholders to understand what are the most important things that we need to be focused on and what our greatest opportunities are as a company," Beuchel said. "And there are a couple areas we really wanted to double down on. One was reaccelerating growth. We'd been in kind of a space where we'd really pulled back on the number of new stores that we were opening,"