Chances are you’ve joked, or even griped, that Whole Foods really should be called “Whole Paycheck” because its grocery prices are so high.
As the leading retailer of natural and organic foods and America’s first national “Certified Organic” grocer, Whole Foods appeals to people who don’t mind paying more for food they consider healthier and more sustainably produced. In that sense, the prices are high for a reason.
But Whole Foods faces increasing competition from big-box retailers, such as Wal-Mart and Target, and grocers, including the biggies in Las Vegas: Smith’s, Albertsons and Vons, which are aggressively expanding their natural and organic offerings.
This is a direct result of consumer demand. According to the Nutrition Business Journal, U.S. sales of organic products were an estimated $28 billion in 2012 and are expected to reach $35 billion this year. Organic products are available in almost three of four conventional grocery stores, according to the USDA.
The problem for Whole Foods is that Smith’s and Wal-Mart are selling similar organic merchandise for a lot less money. That’s eating into Whole Foods’ market share, and the chain is struggling to maintain sales growth while watching its stock drop sharply this year.
And although it hasn’t slowed the chain from adding stores to its stable of more than 380 nationally, it has gotten Whole Foods’ attention.
The grocer announced details of its first national marketing blitz, which launched last week and is designed to tell consumers why it should be their go-to grocer. The slogan for the ad campaign: “Values matter.”
“Whole Foods Market has been subtly telling our story for decades, and now is the time to overtly communicate what we’ve spent more than 35 years creating as change agents in the food world,” said Jeannine D’Addario, Whole Foods Market’s new global vice president of communications.
Whole Foods also is planning to expand home delivery and test a loyalty program.
But Whole Foods may have to do more if it wants to keep its customer base and attract mid-level consumers.
Whole Foods can and should have weekly sales fliers delivered by snail-mail. Currently, the Whole Deal, its booklet of coupons and recipes, comes out only occasionally and is available only online or in stores. People who don’t follow Whole Foods on social media or shop there regularly might not know it runs really terrific sales. Store brass need to do a better job getting the word out.
And they can and should drop prices. That’s key if the store wants to shed that “Whole Paycheck” moniker.