Organic Grocers Make Moves in Whole Foods’ Backyard

Discussion
Sep 10, 2009
George Anderson

By
George Anderson

Austin, Texas is the home of Whole Foods. Maybe that’s
what has driven organic and conventional food competitors from other places
to set up stores in and around the Lone Star state’s capital.

Phoenix-based
Sprouts Farmers Market opened two stores in the Austin-area last week.
It has plans to open two additional locations before the end of the year.

Doug
Sanders, president and chief operating officer of Sprouts Farmers Market,
told The Packer, "We’ve been very well
received. People here say they’re just glad to have somewhere else to shop."

Other
companies that have set up stores in Austin over the past year include
Newflower Farmers Market (owned by Sunflower Farmers Market) and Sun Harvest.

Discussion
Questions: Which grocery operator in the organic foods space impresses
you the most? Do you think any of the new upstarts will present a significant
challenge to Whole Foods? How much of a dent are conventional supermarkets
making in the organic foods market?

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9 Comments on "Organic Grocers Make Moves in Whole Foods’ Backyard"


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Lee Peterson
Guest
11 years 8 months ago

I don’t know; pretty tough to move Whole Foods off their pedestal to me. They’ve got it all, including a lower priced private label that is excellent, to say nothing of scale and incredible store environments and associates. Yeah, they’ve hit a bump in the road, but the idea and execution is so strong, I can see them thriving well beyond where they’re at now. It’s easier to fix operations when the brand you sit on is strong, and there are few brands in the U.S. as top-of-mind powerful as Whole Foods.

David Livingston
Guest
11 years 8 months ago

Publix seems to be the most innovative of the conventional stores. Still most conventional stores seem to be more press release than reality when it comes to the success of organics. If we didn’t read about them from their own press releases, we wouldn’t have noticed their presence in organics. Whole Foods is still tops and no one seems to be challenging them. I went to Whole Foods recently and noticed that for the most part, the center store was junk food like you find in other stores except it was organic junk food.

G wagner
Guest
G wagner
11 years 8 months ago

Fortunately, I see conventional grocers stocking more organic produce. On the flip side,they still sell junk in the remaining 95% of the store. By junk I mean items containing trans fat, HFCS, artificial colors, fake flavorings, etc.

I feel more comfortable as a consumer purchasing all the items I am going to put into and on my body from organic grocers who refuse to stock unhealthy stuff in their store. I realize not everyone lives in an area where they have a choice to do this, so certainly having a small organic section is better than nothing.

As more and more people realize that eating the SAD (Standard American Diet) way is why they feel so tired, are so fat, and look so bloated in the face (look at shoppers coming out of Whole Foods vs. those in a conventional grocery store and you’ll see what I mean!) they will start to migrate to better food.

Paula Rosenblum
Guest
11 years 8 months ago

Whole Foods problem is best described by its nickname “Whole Paycheck.” The prices are high, and the presumption is, it’s because they sell higher quality product.

However, the company does a TERRIBLE job staying competitive on easily recognizable products, and generally runs about 25% above companies like Publix. Sooner or later, this is going to create problems with a portion of its customer base.

That leaves us with the produce and fresh food–which are considered the highest quality. However, the “green footprint” of these products is not great–they are typically shipped across the country to local stores.

If I were the CIO at Whole Foods, I would lobby for a price optimization and lifecycle pricing implementation. The current pricing policies put the company at risk. Once trust with its core customer base is broken, the company will be in big trouble.

Gene Detroyer
Guest
11 years 8 months ago

Whole Foods’ biggest competition will come from the better conventional operators. Organics are for real and are growing. The younger demographics of those who look for organics are also a positive trend. The better conventional operators will find the right mix of organics to service the needs of their customers.

The organic trend that started in produce has moved to dairy, chicken, beef, and household products. There are few categories that one can not find one or more organic/natural alternatives.

Stop & Shop and A&P both have excellent organic, private-label programs. Organic/natural private label perhaps provides the biggest opportunity for conventional supermarkets. Organic/natural buyers have already broken with the brands. A retailer that can give their customers confidence and quality with their own line stand to be brand replacements.

Steven Johnson
Guest
11 years 8 months ago

Whole Foods customers are still looking for better-for-you products. However, today they like the prepared ready to eat and ready to heat grocerant style food that Whole Foods is selling more and more. The customer is moving forward, so must Whole Foods.

Anne Bieler
Guest
Anne Bieler
11 years 8 months ago

Whole Foods established their business based not only on healthful and organic lifestyles, but also on quality and taste. The food is freshly prepared in the deli and take out sections as well, good product choices across the store have been screened for the best alternatives for healthier eating–we don’t have to read the fine print looking for the hidden trans fat. Even better, products are are also selected for taste and appeal.

Agree that the competition will come from conventional grocers who understand and execute well. Publix Greenwise is a good example, now experimenting with small and larger formats stores. Loblaws has had good success with their Blue Menu line, where it is positioned as a natural, minimally processed version next to selected President’s Choice labels. Loblaws also has an organic department within the store, giving choice within the conventional grocery offerings.

Marge Laney
Guest
11 years 8 months ago

I hate grocery shopping. Seems I have said that somewhere before recently. Anyway, I like Whole Foods. When I walk into the store I am usually met with a friendly smile and a comfortable shopping experience. And although I know it costs more, it’s worth it to me. I can get the stuff I want and the quality is better than in most other markets around town.

We don’t have a lot of choice when it comes to organic grocers; most of the chain grocers just carry some organics and it’s hit or miss. On occasion I have tried the other stores, even Central Market which is an organic grocer, but I always go back to Whole Foods. I guess I’m one of those core customers they better take care of.

Clive Randolph
Guest
Clive Randolph
11 years 8 months ago

No mention of how many customers Whole Foods alienated when their CEO came out against health care reform. And no mention of Trader Joe’s as a rival. Quality products, great prices, incredible customer loyalty.
By shopping TJ’s, Grocery Outlet, and our local food co-op, we get great, healthy, organic products at discount prices.

I think potential Whole Foods competitors could use Chipotle’s as a good model; a restaurant chain that grew from 15 to 900 stores in short order.

The founder/CEO focuses on quality product and a green approach to everything from the building materials to high efficiency gas grilles, to generate a healthy bottom line instead of ruthless exploitation.

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