FD Buyer: Whole Foods – Retailer of the Year
Through a special arrangement, presented here for discussion
is a summary of a current article from Frozen & Dairy Buyer magazine.
Foods Market is our Retailer of the Year for so many good reasons
it’s hard to know where to begin. I’ve always been a huge fan of
the company because it is truly "the consumer advocate," having earned
the trust of its loyal shoppers by genuinely looking out for their interests.
competing retailer said Whole Foods has proven to be a "game changer" in
the retail food business.
"They have become the national brand for products that people believe
are better for you: organics, natural, HBC, wellness in general, fresh seafood,
competitor said. "They charge a premium and they have taken a lot of heat
for their prices. It is interesting to note that in most cases I have observed
they are less expensive than many of the independent or small chains of organic
retailers — which, when you think of it is really their competitor, not traditional
The competitor added that similar to the impact Walmart has
on the industry, when Whole Foods says it will not buy a certain product or
products with certain ingredients, it sends a ripple through that entire supply
"I think they have a stronger loyalty from their customers than almost
any food retailer in the country," the competitor adds. "I also think
this loyalty is based upon the ‘trust’ that their customers have
in them to provide the type of foods/products that they are looking for. Their
customers even seem to like it more when they move toward a more ‘militant’
stance. The wellness/organic/natural consumer is a real challenge to fit into
traditional demographic profiles. They have participants in every demographic
segment. Their customer is just as likely to be a high-income person driving
up in their Mercedes as it is to be a young adult riding a bike and spending
a third of their limited income on the products that Whole Foods provides."
"As industry observers, we stand back and say Whole Foods is way too
expensive for the average household, their products are too specialized, or
that they will get customers for some things not available elsewhere but they
will not get customers to buy a full basket," the competitor concludes. "To
all of us with that perspective I suggest two things. First, spend more time
in their stores to see how wrong your basic assumptions are. (Careful though,
you likely will see some of your customers and you need to be prepared.) And
second, go ahead and move into the 21st century — consumers are loyal
to themselves first and then loyal to the retailer that allows them to be loyal
Discussion Questions: What’s behind the strong loyalty so many of its shoppers have for Whole Foods? What tactics and strategies can mainstream supermarkets use to compete better with the chain?