Whole Foods CEO John Mackey:We Sell A"Bunch of Junk"
The article cited above is almost a paraphrase of one that appeared in the Wall Street Journal last week, but I got a different message from it. While the above article did the equivalent of jumping on a sound bite and running with it, the tone of the original WSJ aritcle was somewhat conciliatory as Mackey pledged to get back to the basics of why people shop Whole Foods.
Of course, it comes with the report of sales slipping, which makes Mackey a businessman, not totally altruistic. But he wasn't flipping off the customers by any means.
Okay, I gave a link that for some reason goes to a partial read, but wants you to subscribe (even though I had the whole article and don't subscribe on this computer). So if you're really interested, Google: Wall Street Journal Whole Foods John Mackey
Then, the third or so item down is "As Sales Slip, Whole Foods Tries Health Push" -- I selected that and got the complete article.
I got the same impression about the article cited in the OP. There's no doubt that WF has a winning formula in "normal" times. I'm guessing the reason their sales are not where they want them to be is twofold:
1) "It's the economy, stupid!" Their pricing is outrageous. Aside from a few items that are hard to find elsewhere, I don't see the point in doing any regular grocery shopping there.
2) The amount of expansion that WF has embarked on over the past 15 years bucks the trend of most other "grocery" chains. While most were consolidating and buying each other out, WF kept opening new units - I think this coincided with the increasing popularity for more specialized foods and groceries among the US population. Building grocery stores from the ground up is an extremely costly process, as is keeping their doors open. As WF opened more units in the same general area, I am sure they started to experience diminishing returns in their investment. New stores becoming closer and more convenient to shop at start to cannibalize sales at the original stores.
The CEO's proposed cure? I don't know - I have a hard time believing that in a time of recession, reverting back to where they started will increase their sales. The health-conscious shopper is a specialized niche where most (at least in LA) are above-average income and are already shopping at WF. I think they've already pretty much captured that market. I think they need to focus on their prices.
i've never found any rhyme or reason to their pricing. i occasionally make happy discoveries - some of their conventional offerings like non-organic cottage cheese and my favorite Skim Plus milk are cheaper there than they are my local Pathmark or A&P...and they even have a better price on organic broccoli than Trader Joe's does. and *some* organic or specialty products are cheaper there than they are at the regular supermarket chains (which usually have a major markup on "premium" items like that)...but there's no consistency or method to the madness.
Maybe the method is to have the occasional lower-priced itemin order to make the less-than-attentive customer get the idea that they are competitively-priced overall.
When they opened in the town where I delivered mail, they at first included their circular in the weekly "marriage mail", which is postal lingo for the piece of mail containing the supermarket circulars and missing child cards, I'd occasionally stop in for the loss leader speciaqls but little else. Apparently I wasn't the only one - they soon stopped mail advertising.
The comment seems just a little bit out of context. Reading the article (which you were good enough to link to), he seemed to be saying something more like "a lot of what we sell is junk, and we have a responsibility to educate people better on their food choices." That's a far cry from the connotation "all of our stuff is crap" (which is what the pizza guy seemed to be saying).
open mouth, insert foot...and hope that foot isn't made from genetically modified ingredients ;)
WFM lost sight of its roots a long time ago.
case in point - an exchange between me and the Assistant Kitchen Manager (Frank) at my local WFM a few weeks back:
Me: Umm, Frank? When did Whole Foods lift its ban on products with HFCS?
Frank: We didn't.
Me: Then why does the ingredients label for the turkey meatloaf in your prepared foods case say that High-Fructose Corn Syrup is one of the components of the ketchup in there?
i don't know what's worse...that they used it, or that someone there was dumb enough to put it on the label.
of course, all of this doesn't mean i stopped shopping there, because they still offer certain things that i just can't find anywhere else. (plus, it's less than a mile up the road from me and traffic sucks around here.) but it's gotten to the point that if i *can* buy an item somewhere else, then i most likely will. as a result, i spend a lot less time and money at WFM than i used to...and i definitely get a sense of satisfaction from giving my business to places whose employees actually seem to give a hoot.
A Toronto-based pizza chain named, surprisingly, "Pizza Pizza" had its president give an interview to a local magazine a few years back. He famously said something along the lines of "people don't care about quality when they order; they just want a belly-buster and they want it fast". Not surprisingly, business nose-dived when the comment got out, and a whole bunch of competing chains popped up over the next few years, emphasising taste and quality. They've fought back since then, and truth be told, there isn't much difference between the major chains now in taste or quality.
And they're all lousy compared to an authentic New York slice.