Progressive Grocer

FEB 2017

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W hen I ponder the many factors at — and in — play for Whole Foods Market, coupled with a recent personal experience, I must candidly admit: I'm just not sure what to think. Faced with a herculean task of putting its supernatural genie back in the bottle, the Austin, Texas-based retailer is, by all estimations, waging an arduous uphill battle. After it arrived more than a tad late to the party with a lower-price campaign, digital coupons, a loyalty rewards program (that's reportedly set to roll out nationwide this year after two-year pilots in Dallas- and Philadelphia-area stores), and a value-positioned, small-format model (three stores open, with another 23 in development), Whole Foods' plot has thickened further of late with a few more eyebrow-raising actions. Following a prolonged stretch of rocky per- formance, including a 2.6 percent decline in 2016 Q4, the chain late last year dismissed co-CEO and 25-year company vet Walter Robb in a bid to return to its roots, with co-founder John Mackey now man- ning the fort solo. While the jury remains out — and will likely continue to be so for the foreseeable future — on the validity of that move, another specula- tive hotspot surfaced at press time with the news of planned closures of the company's three regional central kitchens in favor of an outsourced network of suppliers that will use its recipes. e company said the decision was "based on a movement toward streamlining operations for prepared foods," which, for many observers, seems at odds with the role and reputation of its widely admired signature category. While there's a clear business case to be made for outsourcing to central kitchens — the transition to which promises to be precarious and complex — some read it as a telling sign of Whole Foods' larger awakening as it comes to terms with the merci- less barrage of competition that's collectively smother- ing its ability to gain a meaningful edge. With little room for error, Whole Foods is at a real crossroads on its journey to reinvention, which includes a beefed-up marketing and advertising plan that Mackey described last year as "the next big step. We can lower prices here and there, but if people don't know about them, we won't get the full lift." While Whole Foods is clearly doing more to toot its own horn by actively encouraging con- sumers, through advertising and related multi- media efforts, to shop its stores, I would respect- fully suggest that it's also time for the company to rethink its grass-roots game plan — especially as it pertains to grand-opening events — which is easily within its control and devoid of com- petitive considerations. Case in point is an interesting experience I had during a recent, open-to-the-public sneak peek at one of the company's newly opened stores. I pre-registered to attend one of the daylong series of guided tours held three days before opening day, staged in 15-minute intervals, for a look-see at select departments, whose team leaders discussed sourcing practices and ingredients used in the coffee bar, meat/seafood, bakery and prepared foods areas. While the vast store perimeter was clearly not ready for primetime, with fresh cases and displays still under wraps prior to being set and ready for the main event, attendees' efforts to peruse the full store were thwarted due to "safety reasons." Further, when considering its stance as an early, vocal adopter of "transparency" — which was, incidentally, voted the Word of the Year for 2016 by members of the Association of National Ad- vertisers — I believe Whole Foods would be wise to get out of its own way and talk about the things people really want to hear – lower prices, conve- nient solutions and digital offerings – which just so happen to be the identical things the company is investing in heavily to improve. After nearly singlehandedly setting the natural food marketing framework for the rest of the indus- try to follow, Whole Foods is now in a plum posi- tion to take a page from conventional supermarkets' playbook by authentically communicating all it's doing to broaden its appeal with price-sensitive shoppers throughout the whole store. PG Wholly Transparent? Whole Food needs to extend its fervor for transparency and authenticity to how it communicates its commitment to creating a convenient, affordable, digitally-enabled shopping experience. Meg Major Chief Content Editor [email protected] Twitter @Meg_Major/@pgrocer The Last By Meg Major 114 | Progressive Grocer | Ahead of What's Next | February 2017

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