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For the first time since opening their doors in 1992, Whole Foods is in trouble. The “organic food takeover” by grocery giants such as Walmart, Kroger (King Soopers) and Costco threatens their core business model, and while they can bounce back, they must first change a few important things.
As Whole Foods languishes in its longest stretch of declining sales since opening, the organic industry booms. In 2016, the Organic Trade Association reported that nationwide sales of organic food more than tripled between 2005 and 2015. According to The Wall Street Journal, Whole Foods’ competitors, such as Kroger and Albertsons, recently posted annual increases of more than ten percent for natural and organic foods.
The grocer’s struggle sent shockwaves through Boulder when the company decided in February to close its Baseline location, one of nine store closures across the country. As such a health-conscious city, you’d think Boulder would be immune to such an event – reality tells a different story.
In order to fight back against the proverbial machine, Whole Foods must become more like it – while also staying true to its “specialty store” identity. This involves addressing the high prices that may cause consumers to shop organic elsewhere. In this regard, Whole Foods may be on the right track.
In 2015, Whole Foods hired former Target executive, Don Clark, to head its grocery operations. His plan to lower prices by cutting unnecessary costs, as he did during his tenure at Target, could revitalize sales at the organic grocer.
Ultimately, future success depends on striking the right balance between quality and affordability.
While many people opt not to pay a premium price for exotic produce and specialty meats, sacrificing product quality is not the answer to Whole Foods’ declining sales. Rather, to preserve their identity and lower costs they must make their operations more efficient from top to bottom.
Whole Foods must also advertise their strengths more effectively. Commercials consistently tout their product quality, but often forget about their diverse selection of prepared foods. The Whole Foods website lists 14 prepared foods departments, including the BBQ shack and Parisian café, which they should emphasize in their advertising efforts. If commercials featured mouth-watering temptations for breakfast, lunch and dinner, more people might stop in for a bite to eat while grocery shopping, killing two birds with one stone.
Now that the novelty of shopping at Whole Foods has worn off its time for the company to make some changes. As the threat of Walmart and other supermarket devouring the core of its business mounts, Whole Foods must act quickly to reverse its fortunes. While the store does many things well, to attract regular customers Whole Foods must acquire a new outlook on the food-shopping climate of our country.
Contact CUI Opinion Columnist Will Suhrie at william.suhrie@colorado.edu
