Whole Foods tackles ‘negative narrative’ with national campaign
In an effort to boost traffic and help eradicate its "Whole Paycheck" image, Whole Foods last week announced plans to launch its first-ever national marketing campaign.
The campaign, to launch this fall, isn’t intended to "drive short-term" sales or traffic but "be focused more on our differentiation, our values," as part of a long-term branding emphasis, said co-CEO John Mackey on its second-quarter conference call with analysts.
"We’re trying to advertise who we are," said Mr. Mackey. "We’re trying to change what we think is a negative narrative about our company. And we’re trying to be very clear what makes Whole Foods Market the unique special better company that we are."
The campaign comes after the grocer missed on same-store sales in the second quarter and lowered its outlook for the fourth consecutive quarter. The shortfall was blamed on ongoing price cuts, cannibalization, and new competition. Investors have been concerned about mainstream grocery discounters like Walmart expanding their natural and organic ranges.
"Natural and organic products are increasingly available, but no one does what we do," said Walter Robb, co-CEO, on the call.
The campaign will highlight that Whole Foods is "the leading retailer of fresh, healthy natural and organic foods, offering the highest quality standards and an unparalleled shopping experience." It will tout transparency around products, including its 5-Step Animal Welfare ratings in meat, Eco-Scale ratings for cleaning products, sustainability ratings in seafood, and GMO labeling. This fall, a Responsibly Grown rating system arrives for produce and flowers.
But the overriding message will be highlighting "both our value and our values" that management implied isn’t being heard.
Further investments in pricing are planned this year but some analysts appeared disappointed they won’t be featured in the campaign. That’s partly because promotions are set on a local rather than national basis. Management admitted it’s been challenged getting the competitive pricing message out there.
"Even though we’ve been doing the value investments for a while, particularly with our 365 line … we’re still in the early innings of really learning and growing in how to do this," said Mr. Robb. "We recognize that we can do a better job communicating to the customers."
- Whole Foods Market Reports Third Quarter Results – Whole Foods
- Whole Foods Market’s (WFM) CEO John Mackey on Q3 2014 Results – Earnings Call Transcript – Seeking Alpha
- Whole Foods sets first national marketing effort – Supermarket News
- Whole Foods Again Lowers Sales Projections – The Wall Street Journal (sub. required)
- Whole Foods Lowers Sales Forecast as Rivals Gain – Bloomberg News
- Can Whole Foods Escape Its "Whole Paycheck" Image? – Slate
Does Whole Foods need a national branding campaign? What messages should the campaign embrace? How should the chain be getting the word out about its price reductions?