Whole Paycheck. Remember that not-so-adorable nickname for Whole Foods? Recently the grocer announced plans to lower prices on 400+ items in the store from produce to dairy to dry goods. They have come to the harsh realization that while shoppers love the ambiance and the concept, they can’t justify the pricing when the next guy has an equal selection.
Traditional grocers are now touting local and organic along with conventional produce. The opportunities to buy these products are no longer limited to a select few chains or co-op stores. John Mackey, the CEO of Whole Foods, said “we’re adapting to the reality of the marketplace”.
While the economy has technically recovered from the recession, people have learned a valuable lesson that only seemed to apply to our parents and grandparent who lived through the Great Depression; saving is a virtue. The US credit card debt continues to decline and American’s savings have accelerated. That is possible due to watching the pennies on a daily basis.
There will continue to be ‘margin pressure’ throughout the supply chain. The key is to provide great value to your customer. Save them some time, provide them greater yield, assume some of their burden and you will prosper. Whole foods will be OK as long as the customers continue to walk through their doors. By constantly adapting to the changing customer needs and wants, they will thrive.