Whole Foods Touts Low Prices/Savings

"The Real Deal" is that Whole Foods prices will still be high. They have to hope that their loyal customers stay affluent and addicted to the basic WF marketing plan.

Gene Hoffman, President/CEO, Corporate Strategies International

If Whole Foods consumers are not interested in what happens to be "on deal" any given week or do not want to spend time going through the 28 page booklet when shopping, they either need to be willing and able to continue paying the high prices or consumers will look for alternatives. The list of alternatives are certainly increasing not only from other retailers like Henry's and Sprouts, but also from established chains that are increasing the number of their "organic" products.

Camille P. Schuster, Ph.D., President, Global Collaborations, Inc.

What it says is that its executives are worried about the impact of an economic downturn. As to whether or not it will work, let's just say price impressions take a long, long, long time to turn around.

Ryan Mathews, Founder, ceo, Black Monk Consulting

I don't think Whole Foods is doing it because they're hurting. They are probably finally getting around to addressing the widespread perception of "Whole Paycheck." That perception is sometimes earned, sometimes not. Good move for them, in at least addressing it with a plan. Over the long haul, it will help.

Warren Thayer, Editor & Managing Partner, Frozen & Dairy Buyer

I don't see prices declining to the point that middle America will be shopping there. They might go down just enough to keep some credit card millionaires from defecting. Sometimes the "Whole" point of shopping at Whole Foods is so consumers do not have to stand in line with low income shoppers and they can impress their neighbors by putting their recyclables on the curb in Whole Foods paper bags.

David Livingston, Principal, DJL Research

I see this as a brilliant move by Whole Foods. I have been concerned for years about the higher end grocers and their ability to adjust during a down market. Being proactive in this way lets their customer know that they understand the current market conditions and how it impacts them.

John Crossman, President, Crossman & Company

I think that their new programs will draw price sensitive customers into the store and will help to reduce the "Whole Paycheck" image.

A new Whole Foods just opened in Reno, NV where I live. Within a couple weeks, many of my neighbors are raving about the quality and shopping experience which never happened with the previous Wild Oats store that was replaced by the new store.

It is very clear when you shop the store that they are making a big effort to present a case that they aren't an expensive alternative to the traditional supermarkets. They do this by showing competitive stores' receipt tapes by the front door and by having displays of popular products in Reno and showing the competitors prices.

They are clearly more promotionally oriented than they were before and have clear promotional messages in most departments. Like Costco, they just do a great job on impulse sales and it's hard to get out without spending more than you would at the Raley's or Safeway down the street. Those wishing to save money should use a shopping list and get out of the store as fast as possible!

'dalecbyrne'

If you are struggling financially, as many Americans are, then Whole Foods is not the answer. Walmart wins every time....

Tony Orlando, Owner, Tony O's Supermarket & Catering

"Whole Paycheck" is being defensive with its new low price real deal promotion. Their stock is tanking, big time. They are being bombarded on all sides by Trader Joes, Fresh & Easy, A&P/Waldbaum's/SuperFresh Fresh Markets, Harris Teeter, Bloom, Safeway lifestyle, Fresh Market and others.

So they are taking defensive measures. They better pray that their affluent customers hang on. Dire consequences for WP are on the horizon, if they don't retain these customers.

The other guys carry the same stuff, at lower prices, with most offering the "whole" shopping experience. In this age of $4-$5 a gallon gas, one-stop shopping for organics, center store stuff and green products just makes sense. The Whole [Foods] niche has just gotten way too expensive.

'weo'

This isn't a new strategy from Whole Foods. For several years now they've been taking steps to change perceptions. I remember a few years ago they took out a series of ads in the New York Times (just the edition distributed in the Tri-State area, not the national one) trumpeting the 365 line. A couple of years ago several regions (and now it looks like it's national) started conducting weekly "value tours" of the stores to help shoppers understand how to eat healthy on a budget. Also, the new "Real Deal" program includes a blog on the WFM website--it's not just the booklet and coupons. Some of the information is absolutely counter-intuitive from a retailer perspective, advising people to avoid buying certain products that Whole Foods Market sells and making up things in their own kitchens instead. But it's "authentic" in that it takes the consumer's "side," and WFM's shoppers value authenticity highly.

The national discussion of Whole Foods Market (not just the one on RetailWire, but in other forums as well) tends to merge together their perishables, which are priced higher, with their grocery. I have found personally that I can save money on natural grocery products by shopping at Whole Foods Market, and I live in a city (Denver) with plenty of other choices, including Natural Grocers by Vitamin Cottage, Sunflower Farmers Markets ("Serious Food, Silly Prices") and (soon) Sprouts Farmers Markets. The amount I save by buying plenty of 365 product allows me to afford their superior perishables; I shop multiple grocers, so if I know Whole Foods charges more for something that doesn't have a private label equivalent, I buy it elsewhere. I probably fit into the category of "core natural foods shopper," which is WFM's base, and I'm sure that there are hundreds of thousands of others like me learning how to keep Whole Foods Market part of our lives by shopping wisely. I don't think Whole Foods Market needs to worry too much about erosion from its base, and if my local store's business level last Sunday is any indication, things are just fine. What it needs to do is educate the people who have just recently transitioned over from conventional, or who shop both conventional and Whole Foods. This program is a continuation of a good start.

'historymystery'

I'd like to second what the last poster wrote: I think there are issues of perception vs. reality, and different levels of competitiveness based on the product; like anyone else, WF wants to steer you toward house brands and/or unique SKUs, for which they can either earn high margins or charge monopoly prices (accordingly)... but not EVERYTHING is expensive.

'notcom'

The big and busy Whole Foods in Chicago's affluent Lincoln Park neighborhood recently failed not one but two health inspections and was closed for a couple days by the Health Department to clean things up. (They are now back open.) Not only was this shocking on several levels to customers who expect only excellence from Whole Foods, but it raises questions about whether corners are being cut elsewhere behind the scenes, and why.

'Liatt'

Sorry, folks, to rain on all your criticism of posh people who shop in order to show off where they shop, but I think this is a good, sensible move. It makes a connection between the business and its customers who can, as usual, take it or leave it. But I give them marks for trying.

Bernice Hurst, Contributing Editor, RetailWire

This is just an opportunity for Whole Foods to do what every other grocer does - have the vendor pay for promoted (discounted) items. Their pricing, service and product mix isn't changing. This will leave their model intact, which is critical to their success both from a consumer perspective and that of Wall Street.

Kai Clarke, President, Miraclebeam Products, Inc.

The perception that Whole Foods is expensive is, like all perception, selective. I live in Seattle, an organic food paradise, and shop my local coop as well as a variety of area stores and farmer markets. My selection is limited by my food intolerances, the things that I can't eat without getting sick. Whole Foods has made a great effort towards developing gluten free products. This may be because one of their bakers is gluten intolerant, but they saw the need.

The prices on some of their organic produce are competitive and even cheaper than I can find elsewhere (see juicing carrots). One of the biggest draws in my local store (we have 4 in the area and another one under construction) is the prepared foods and hot food/salad bar. These are good quality and soooo convenient, but set my wallet back far more than the area restaurants.

If you shop your wallet, one stop shopping is a thing of the past. Plan your trips, pick your route and stop by Whole Foods when they have the deal.

'haredeva'

This is something Whole Foods needs to test. Yes, they are being bombarded by everything from TJ to Safeway lifestyle to Elephant Pharm (and that's just here in California alone). That's because they've been successful, and success draws competition. Now they need the next set of ideas, and this might be one of them.

Incidentally, it isn't like they are betting the farm on once idea. Their new store formats in Napa and Oakland show they are trying to push the envelope in many ways. Now if WF tried a Whole-Foodsy Fresh & Easy format knock-off, that could be interesting....

Jonathan Marek, Senior Vice President, Applied Predictive Technologies

Like many well-run retailers, Whole Foods tries all sorts of new approaches, always probing for a competitive advantage. "Low price" and "value" are relative terms. Whole Foods isn't comparing itself to Dollar General.

Having said that, I propose a new supermarket industry award: Best New Marketing Without Recipes. Recipes are often the most wasteful part of any marketing message. Think coupon waste is scandalous? Recipe waste is 100 times worse. For every million recipes distributed, how many are actually prepared? How many times a year does your family sit down to anything cooked using a recipe acquired in the past 12 months? The Museum of Uncooked Recipes has the largest warehouse in the supermarket industry.

Mark Lilien, Consultant, Retail Technology Group