Whole Foods Seeks To Shed "Whole Paycheck" Image

http://www.nytimes.com/2008/08/02/busin ... nted=print

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Interesting piece. I found this passage, especially provocative:

Andrew Martin, New York Times wrote:Walter Robb, the company’s co-president, acknowledged that Whole Foods was fighting strong consumer perceptions about the chain’s prices, and he added that some of that was deserved. But he said the company had made a strong effort to challenge its competitors on price.

“I’m getting a little tired of that tag around our neck,” he said, referring to the nickname. “We are a lot more competitive than people give us credit for. We challenge anyone on like items.”

I think the key here is 'like terms.' I'm not really a fan of WF, but you have to give them their due. In the current marketplace, consumers can't normally have it both ways. If you want higher quality, you're going to have to pay for it. Cheap food is often cheap for a reason (or several reasons). When you shop at WF, it's more likely you can know -- and feel comfortable with -- the source of the food you're buying (of course, that doesn't necessarily make it better food). Unfortunately, in today's market, that has become a luxury, and a premium must be paid for it. Hopefully, in the wake of recent food scares, safe, high-quality, reliably-sourced food will become more common at mainstream retail grocery outlets. But until it does, WF offers something that many other grocery chains cannot offer at any price. For some shoppers, that additional peace of mind is worth the premium.

In any event, it's interesting and not entirely surprising that the folks at WF are now focused on addressing their (partially undeserved) reputation. They seem to be a wise, responsive bunch and their timing is excellent. As they continue to grow, the more influence and leverage they will have on the overall market.

=R=

I was more struck by this passage:

“The economy caught a lot of them off guard,” said David Orgel, the editor in chief of Supermarket News, a trade publication. He said that many grocers, aiming to compete with the likes of Whole Foods, have spent the last few years positioning their stores for a "more upscale experience." They are suddenly scrambling to give consumers the budget items that they are demanding.

Making matters worse for Whole Foods, consumer interest in organic food appears to be leveling off after several years of double-digit growth, according to the Hartman Group, a market research firm specializing in health and wellness.

Laurie Demeritt, president of the Hartman Group, said core consumers for organic goods, about 15 percent of the population, are becoming even more committed. But people less attached to such items are continuing to buy organic dairy products, produce and meat, and are buying fewer organic goods among packaged items, like cereal and crackers, she said.

Whole Foods is "competitive" now partly because the big-box chains have upscaled. But it can't compete with stores like Shop & Save or Marketplace on Oakton.

I can't even remember the last time I set foot in a Whole Foods. It's been a year, at least.

This week, leading five customers through a store here, he breezed past the triple cream goat cheese, $39.99 a pound, and the fresh tuna, $19.99 a pound, to focus on the merits of beans, chicken thighs and frozen fish.

I note that the Whole Foods that I shop in usually sells boneless chicken thighs for $4.99 a pound as opposed to, say, Tony's Finer Foods where I may pay $2.69 a pound at most or $1.99 a pound on sale for the same product. So, they may be moving shoppers from a more expensive item like, say, their own ridiculously priced $8 a pound boneless chicken breast to another lesser priced item like the $4.99 a pound chicken thighs versus being competitive on that item with their competition.

I stiil do find the smokehouse brisket a relatively good deal at $10 a pound though I do bristle at the fact that they want to charge me for a couple of bottles of sauce when I buy 15 pounds at a time.

I have never seen pre-made burgers for a dollar a piece at my local Whole Foods. Nor have I ever seen WF's fresh tuna (which Costco sells fresher and better kept for $9.99 a pound) for less than $21.99 a pound.

Retail marketing is a curious thing that I admit I don't understand.

I am not a fan of WF, and rarely shop there. Typically the only reason I go to a WF store is if I am having trouble finding a ripe avocado, or some other harder to find fruit, or vegetable. Most times I can find these items @ Caputos, so I can count on both hands the ammount of times I have set foot in a WF. I rarely buy organics, or the other items WF seems to market.

When wandering around the store I see their meats are ridiculously priced, as well as there fish, and other seafood. Perhaps I am lucky to have a great, not just good, local meat market where I get a staff of proffessional butchers who cut meat to order for a fair price. Something WF cannot offer.

I dont think they will be able to change their Whole Paycheck image.

We never called it whole paycheck at our house...

it's "wholly expensive foods"..

I do go occaisionally, just because it's so darn convenient to where I live,
but it IS much more expensive than the Jewel.

YourPalWill wrote:I note that the Whole Foods that I shop in usually sells boneless chicken thighs for $4.99 a pound as opposed to, say, Tony's Finer Foods where I may pay $2.69 a pound at most or $1.99 a pound on sale for the same product.

is it really the same product? Is the chicken at Tony's free range and organic? I'm asking sincerely. Organic meat is pretty much the only reason I shop at WF. If I can get it cheaper elsewhere, I'd like to know about it. (I do occasionally buy organic chicken at Trader Joe's - but they don't sell whole legs)

YourPalWill wrote:Nor have I ever seen WF's fresh tuna (which Costco sells fresher and better kept for $9.99 a pound) for less than $21.99 a pound.

I am sure that I've seen tuna at WF for less than $22/lb - at the very least, when it is on sale.

I haven't eaten the tuna from Costco, but I have a hard time believing it is both more fresh, the same type, and cheaper than what is available at Whole Foods. I'm certainly willing to change my mind, but I'd like to see a little more information.

Their merchandising and display are terrific. They make me want to buy. But despite the fact that any grocery store anywhere represents a calculated psychological assault on your wallet with stacking, positioning, lighting, music, piped in smells, free tasted, fake "specials" etc. all working on you every second, I found myself attributing an extra level of cynical banditry to the WF version.

I'm find with comparing "like with like." What I don't "like" is they way they soften you up with the sense that every single critter or veggie in the store has been raised in a progressive environment, received swedish massage, and a liberal arts education before being harvested to deserve the its price tag, but then when you're looking at the conventionally grown Mexican peppers or pesticide laced strawberries whose provenance is identical to those at Dominick's, the price is still double.

It just seems that they count on the fact that while you may come in prepared to pay extra for "quality", you're going to just throw in the towel and continue to pay extra for thoroughly conventional items as well, either because you don't notice, or because you don't have the time and energy for a separate stop.

That said, some of the house brand stuff is both good, and value priced. But not enough to make me go there much.

What I don't like about Whole Foods is the fact that one can get better bread in prison than at Whole Foods.

Plus the hugely cynical "save the earth, give me $200 for groceries" vibe that the chain gives off.

Marketplace on Oakton is offering "all natural vegetarian" chickens (I didn't look further for the organic label, it may or may not be so) for $2.49/lb. I've purchased Amish Chickens for $2.99/lb elsewhere - there's a whole thread on the subject over here.

Mhays wrote:Marketplace on Oakton is offering "all natural vegetarian" chickens

I'm pretty skeptical about this.

"All natural" means about as much as "luxury" or "gourmet". Vegetarian doesn't mean much either when it comes to chicken. I've been told by farmers that chickens are much healthier if they get some animal protein in their diets (free-range chickens will eat bugs/grubs) and that "vegetarian feed" is a convenience for mass-producers to avoid using poultry feed that could have disease in it, but ultimately leaves the chickens under-nourished. I'm not sure if this is entirely true or not, but it does call into question the value of the buzz-word "vegetarian fed" on chicken labels.

My major problem with Whole Foods is their labeling of "local" items is baffling. I was in the Evanston store last September, a time when there was plenty of fresh new crop apples from Illinois and Michigan orchards on the market. I looked at their apples - priced at $1.99 - and labeled as "LOCAL" and all the apples were sourced from Washington state.

My local independent buys a lot of local produce and prices it at less than half price of WF.

jlawrence01 wrote:My major problem with Whole Foods is their labeling of "local" items is baffling. I was in the Evanston store last September, a time when there was plenty of fresh new crop apples from Illinois and Michigan orchards on the market. I looked at their apples - priced at $1.99 - and labeled as "LOCAL" and all the apples were sourced from Washington state.

My local independent buys a lot of local produce and prices it at less than half price of WF.

Doesn't it seem likely that this was simply a mistake/oversight?

Not if you subscribe to the "vast right-wing conspiracy" theory of WF interpretation and analysis, which, after the pathetic and ridiculous CEO fake-name- chat-room posting scandal, I more or less do.

I shop at Whole Foods fairly regularly, including for most of my staples. The bulk goods and the items in the "interior" of the store (which the article notes are cheaper) are the main focus of our purchases; we get most of our produce this time of year from a CSA and the farmers' markets (although will buy produce there outside of the farmers market season) and I generally avoid the prepared foods and other expensive items at Whole Foods. Most of our dry goods, snack purchases and dairy are 365 brand (WF's house brand), which in many cases are competitive with or lower than branded items of the same type at the big box grocers and elsewhere. We do buy most of the meat for our family at Whole Foods; while it is more expensive, I prefer hormone-free and "naturally" raised meats (I generally am not willing to pay the premium to buy organic meats, but Whole Foods carries "natural" meats and is at least pretty clear on what it means by "natural" -- hormone free, antibiotic free, etc.). Unless shopping for a specific recipe or event, I tend to shop by the sales when buying meats, which helps keep costs down as well. When we do buy produce at Whole Foods, I also tend to try to buy what's on sale or buy some of the bulk packaged goods (like a bag of onions, potatoes or oranges) that tend to be cheaper than the per pound rates for loose produce of the same type.

I am somewhat annoyed by the sanctimonious and preachy vibe Whole Foods puts out (I just about destroyed the TV playing the looped video of the CEO talking about the virtues of Whole Foods that ran for the first 4 or so months of the opening of the South Loop store) and am perhaps more conscious/concerned than I should be that I am not shopping there to communicate something or other regarding my status; I just think that if you shop right there it is generally competitive in terms of a one-stop shopping experience. I certainly spend more at Whole Foods than I would if I shopped for various items at a number of different stores, but I think in terms of a one-stop shop that I actually am coming out about where I would if I shopped at any other full-service store in the city for the same type and quality of products. We supplement a weekly shop at Whole Foods with an every-other-week or so Costco trip, plus usually once a week at an ethnic market or Bari, or some other place where we get things that cannot be purchased (or cannot be purchased cheaply -- like limes, which I will not purchase at WF as a matter of principle) at Whole Foods. I used to do the 4-5 grocery stores on any given weekend type of thing, shopping on the basis of the comparative advantage of various establishments for "best" and/or "cheapest", but with two young kids and shrinking leisure time, it just isn't worth it for me any more -- "good enough" and "decent value" work for we are now.

eatchicago wrote: I'm pretty skeptical about this.

I don't blame you - however, as I'm not buying for political reasons but for flavor, and the price was right, I tried them and found they did taste better than their regular chicken, which has either decreased in quality in the last year, or my taste has improved. Aaron's Kosher is also labeled "natural" which is all that differentiates it from Empire or the other brands, which I don't find to be as good (though I have to say, while I don't like to mix food with politics, I am concerned about their business practices) so it must mean something, although humaneness or access to outdoors- probably not.

Darren72 wrote:Doesn't it seem likely that this was simply a mistake/oversight?

No, I doubt it. I have seen it four out of the last five times I have stopped there.

irisarbor wrote:...it IS much more expensive than the Jewel.

Interesting that you say this. I've been doing a spreadsheet of various grocery items purchased at Jewel, Whole Foods, Trader Joes, and some other stores. For the items I buy--which may not be the items you buy, so take this with a big grain of salt--Whole Foods was almost always cheaper than Jewel. On a couple of items (not many), Whole Foods had the best price on my spreadsheet. Oddly, grapefruit juice was one item where WF beat out even Trader Joe's.

After doing this spreadsheet, I stopped shopping at Jewel. I still go to WF a couple of times a month because some of their 365 items are priced pretty well and they have a few splurge items I like and it's about the same distance as Jewel from my house. I had been noticing the past year that Jewel and WF always give me the biggest "surprise!" sticker shock at the counter. My own feeling is that WF has better quality items and a nicer atmosphere so on the days I'm willing to accept a little sticker shock I go there.

I don't know, Whole Foods vs. Jewel on produce prices is sorta like choosing between Russia and China on freedom of the press. They'll really gouge you without a preferred card, too. That's where I nearly always swing by Devon Market after dropping the kids at school, or a Tony's, or Stanley's, or Strack & Van Til or Costco or somewhere to see what they have at half the price of either one of the big chains.

So I agree with the premise, WF is not noticeably more expensive than Jewel normally, but that's not saying much.

Mike G wrote: ...or Stanley's...

Generally I wouldn't second guess a statement like that, but I recently noticed that organic Shitakes at Stanleys were MORE expensive than organic shitakes at WF. In fact I've notice a few items where that is true, although by no means have I made a full comparison. Mostly pre-packaged items, so maybe the loose produce is still a deal. Certainly, when it comes to any non-organic products, Stanley's is a fraction of WF prices. But like-for-like, I wonder how things would stack up. Costco on the other hand is hands down cheaper - even for the organics that they carry (ground beef, whole chickens, Earthbound greens, oatmeal, etc).

The one side of WF that most bothers me though is that I don't find the produce tastes any better than most traditionally produced foods. Somehow I would think that an a farm that strives to be organic would take the extra care to produce a better product, but I find the same bland tomatoes, hard-as-rock peaches, and sour oranges there as anywhere, although they tend to look much nicer on display at WF, and in some cases they do have a superior product. Stanley's is a little hit and miss from a quality standpoint.

The only place I can find exceptional tasting produce is at farmers markets, expecially Green City, which isn't really a suprise. Unlike WF it really is fresh and local and grown by independent small farmers, but it can make WF look like a bargin basement.

wak wrote:....by no means have I made a full comparison.

You're missing out. There's some really good "food nerd" fun to be had from rushing to your computer with your grocery receipt to enter your latest items in your spreadsheet. You know you want to!

wak wrote:The one side of WF that most bothers me though is that I don't find the produce tastes any better than most traditionally produced foods. Somehow I would think that an a farm that strives to be organic would take the extra care to produce a better product, but I find the same bland tomatoes, hard-as-rock peaches, and sour oranges there as anywhere, although they tend to look much nicer on display at WF, and in some cases they do have a superior product.

It probably has to do with the fact that the same large California growers who grow the non-organic produce are growing the organic produce. T&A, Bunny Luv, and the like grow both sets of crops, usually in adjacent fields.

Stanley's is a little hit and miss from a quality standpoint.

Well, yeah, isn't that the point?

You wanna shop, look around and see what's good and carefully shop, you can save a lot of money.

You wanna load up the Escalade, go to WF and pay top dollar and it should all be as good as you're likely to find in any store at that moment.

Mhays wrote:Aaron's Kosher is also labeled "natural" which is all that differentiates it from Empire or the other brands, which I don't find to be as good (though I have to say, while I don't like to mix food with politics, I am concerned about their business practices) so it must mean something, although humaneness or access to outdoors- probably not.

AP wrote:The FDA generally allows foods to be labeled as "natural" if such a claim is truthful and not misleading and the product does not contain added color, artificial flavors or synthetic substances, spokeswoman Kimberly Rawlings said. Agriculture Department policy roughly mirrors the FDA's, though it adds that "natural" meat and poultry products cannot be more than minimally processed.

Mike G wrote:You wanna load up the Escalade, go to WF and pay top dollar and it should all be as good as you're likely to find in any store at that moment.

Well lets just be clear here, it's a Lexus, not an Escalade...

And I wish it were that easy. If I could go to WF and pay top dollar and get consistently good food I might just do it, but that's not how it works out. Instead I have to drive all over town, to H-Mart and Jerry's in Niles, to Costco, Trader Joes, Bari Foods, Stanleys, Carnicerias Guanajuantos on Ashland, Green City Market, Spice House, Devon, etc. I pay as much in gas as I do for the groceries, but at the end of the day, at least I'm eating well.

wak wrote:
And I wish it were that easy. If I could go to WF and pay top dollar and get consistently good food I might just do it, but that's not how it works out. Instead I have to drive all over town, to H-Mart and Jerry's in Niles, to Costco, Trader Joes, Bari Foods, Stanleys, Carnicerias Guanajuantos on Ashland, Green City Market, Spice House, Devon, etc. I pay as much in gas as I do for the groceries, but at the end of the day, at least I'm eating well.

Welcome! You have found your tribe. This is why the gods give those of us in the tribe that wonderful gift called Saturdays.

wak wrote:Instead I have to drive all over town, to H-Mart and Jerry's in Niles, to Costco, Trader Joes, Bari Foods, Stanleys, Carnicerias Guanajuantos on Ashland, Green City Market, Spice House, Devon, etc.

To me, that's the fun part. Instead of taking what I am given at a single location, I can search out the best of what I am looking for.

wak wrote:Well lets just be clear here, it's a Lexus, not an Escalade...

...I have to drive all over town, to H-Mart and Jerry's in Niles, to Costco, Trader Joes, Bari Foods, Stanleys, Carnicerias Guanajuantos on Ashland, Green City Market, Spice House, Devon, etc. I pay as much in gas as I do for the groceries, but at the end of the day, at least I'm eating well.

It wouldn't be so bad if you drove a Prius

It all boils down to smart shopping. You have to do what's best for you. I find prices to be close as they are at any other store - when comparing like items. I also like the extra level of service I get when shopping at WF. You can ask where "____" is, they'll walk you to said item and you'll also get a recommendation. Instead of "Aisle 2 half way down, or maybe Aisle 16 on the end cap".

While I do call it Whole Paycheck (said it in front of an employee once) - I like shopping there. I've never gotten a bad piece of meat, cheese or produce. I'm not forced to pay $40 a pound for cheese - there are other options.

one thing you have to look out for at WF is getting the correct price when your items are scanned at checkout. The North & Clybourn WF is particularly bad about having the correct prices in their system. And then of course you look like a jerk when you stop the checkout person and insist on getting the right price for something...