Half is sometimes better at Whole Foods
Health-food grocery chain aims to cut its costly image by educating customers.
Mon, Mar 09, 2009 at 07:09 AM
HAVE WE GOT A DEAL FOR YOU: Whole Foods Markets are offering Value Tours as part of a chain-wide initiative to emphasize that you don't have to break the bank to get quality food at Whole Foods. (Photo: ZUMA Press)
A Whole Foods Market employee casually walks through her Atlanta-area store, sharing stories about her shopping strategy and sometimes stopping to pick out samples for snacking.
Her group is small — just me and three others on a rainy Friday afternoon — and seeking to save money while still indulging in the store's natural, organic and gourmet fare.
Some tips are obvious — be willing to try new varieties of fruits and vegetables by purchasing the sale items (Empire apples and bunched organic broccoli the week of my visit) and look for weekly specials, such as $8.99 one-topping pizzas on Thursdays. Others are sensible, such as sticking to your list and buying items from the bulk dispensers when you don't need an entire bag of French lentils or flaxseed.
And there's an emphasis on the customer service that Whole Foods provides and how that can help your wallet. Feel free to ask the produce department to cut your cantaloupe in half when you know a whole one will go unused. The same requests are met in the bakery, cheese and meat departments to help customers cut costs.
We're also shown "Don't Be Fooled" signs throughout the store, where Whole Foods has compared its prices to competitors and found itself to be the cheapest.
These and other tips are shared on its "Healthy Wealthy and Wise" store tours offered typically twice a month. It's just one example of how the Austin, Texas-based grocer is trying to get rid of its pricey perception (and the nickname "Whole Paycheck"), particularly during the recession.
"It has a powerful stigma of being overpriced," says Brian Wansink, a professor of consumer behavior, director of Cornell University's Food and Brand Lab, and author of Mindless Eating: Why We Eat More Than We Think.
In-store promotions are wise, he says, because the most important thing for Whole Foods is to give its regular customers a reason to return. New customers are hard to attract these days.
"I‘ve been shopping there for over 10 years and I should have done that 10 years ago," says Sue Pritchard, who joined me on the tour. "You can be overwhelmed and make all these assumptions that are not correct — just thinking that it is a pricey store."
Pritchard was impressed with inexpensive items such as Whole Foods' bags of organic apples for $2.50. She shops at other grocery stores and compares the quality and prices — taking into account weekly specials — when making her purchases.
"I still think they have enough value items," she says. "You just have to pick and choose. That's with any grocery store."
Whole Foods needs to justify why its prices might be higher or when they are lower than competitors, Wansink says.
Offering tours, coupons and cooking classes focused on inexpensive meals is necessary because the store's customers include generations that haven't been taught how to shop, cook or budget, says Pam Murtaugh, owner of a Madison, Wis.-based management consulting practice.
"The perimeter of the store in Whole Foods is where they have generated tremendous traffic and profit," she says. "They need to reorient people to the center of the store, where there are things like ingredients. But ingredients are foreign objects to shoppers and ingredients have not been where Whole Foods have made their money."
Whole Foods has seen store traffic and sales decline, resulting in $32.3 million in first quarter 2009 net income, compared with $39.1 million for the same period last year. Same store sales dropped by about 4 percent, compared with a 9.3 percent increase during the same period last year.
John Mackey, Whole Foods' chairman, CEO and co-founder, says in a statement that decisions made last year to contain costs and cut capital spending are helping the company "successfully manage through this challenging economic environment." Whole Foods, which has 278 stores, is opening fewer stores (10 stores, including five relocations) this year and received a $425 million equity investment last year.
Pritchard says value packs of chicken and fish that can be divided at home and frozen appear to be cost-savers for families, as are sales, such as $7.99 for a pound of shrimp recently. She's also trying to pay more attention to Whole Foods' 365 Everyday private-label brand, which is emphasized during the tour, and she's a fan of the bulk section, which saves her money.
"You just have to know how to shop," she says.
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