Is Whole Foods really that threatened by Walmart offering organics?

[xchrom]

http://grist.org/list/is-whole-foods-really-that-threatened-by-walmart-offering-organics/

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In a hand-wringy piece, The Wall Street Journal wondered on Wednesday why Whole Foods’ stock had sunk 20 percent. Walmart’s decision last month to offer cheap organics might’ve played a role. As Wacko in Chief John Mackey recently told investors, “Competition is more intense right now than we’ve possibly ever experienced before.”

But is Whole Foods actually in trouble? As the WSJ admits, “[Whole Foods] is still trading at 25 times earnings.” And as Annie Gasparro notes, organic and natural food was a $48 billion industry in 2012 — eight times higher than in 1998.

Sure, the market’s dominated by conventional retailers, with 55 percent market share compared to the 38 percent raked in by specialty retailers like Whole Foods and Trader Joe’s, according to the WSJ. But the paper’s hyperventilation seems akin to worrying that McDonalds’ coffee drinks will put Starbucks out of business. You can buy coffee at both places, sure. One is even half as expensive. But some who roll through the Starbucks drive-thru for the classic green straw would never be caught dead at the Golden Arches.


Whole Foods doesn’t just sell organics; it sells an experience. You KNOW you’re gonna find dairy-free ice cream and kombucha samples and a hot lunch buffet with dangerously addictive country-fried tofu. It’s the grocery store version of a gated luxury community. I’m not an economist (I just play one on TV), but I’m betting classism will swaddle Whole Foods like a snuggly blanket.


***IMO walmart will ship long distances to bring people 'organic' food.
also - i don't trust walmart to make sure said food really is organis.
lastly i dislike what i know will be low ball strategies placed on organic farmers.

[sendero]

1. I doubt it..

...... I think HoFu might be feeling the effects of folks getting tired of paying through the nose though.

Part of their response has been to pledge to offer more of their house-brand items, which are usually of good quality and reasonable price, unlike a lot of their inventory. I think they themselves know what's up.

And it's not just Wal-Mart that if offering a bit of competition (a bit is all Wal-Mart offers IMHO), competition in the form of Sprouts and other outlets are springing up everywhere. And they have no problem beating HoFu on price.

I like Whole Foods but they really are seriously overpriced IMHO.

[hobbit709]

2. There's lots of lower priced alternatives to Whole Paycheck here in Austin.

Even H.E.B.'s Central Market is lower on prices and they're way overpriced in my book.

[MADem]

3. Whole Paycheck v. Wally World? They're both GOP strongholds.

Wally World has some "upscale" places, too. I was out in CA last year and I wandered into this brown store; very trendy with tan walls and wooden-ish/bamboo-y type floors, natural light, etc...well, it was a Walmart GROCERY store! If I hadn't seen the logo I never woulda guessed...

I know a lot of Whole Food denizens who aren't too proud to hit the Stop-n-Shop when the same items go on sale...but whatever.

[BeyondGeography]

4. Not seeing it

Two totally different vibes. Unless you're purely motivated by price (and most Whole Foodies aren't, imo) you'll stick with where you like to shop.

[Bjorn Against]

5. I think Whole Foods alienates a lot of their potential customers with their right-wing bullshit

Lots of progressives prefer the sorts of organic and natural foods that Whole Foods sells, but their far right CEO who embraces Wal-Mart's business model is a massive turn off. Trader Joe's offers similar quality organic products at a lower cost and they pay their worker's a decent wage, I really don't know why anyone would choose Whole Foods over Trader Joe's or a local co-op.

[Niceguy1]

6. nope

But I can now afford organics, and some other foods I get are way cheaper than the store I go to on the other side of the block. The close proximity works out hreat as Wal-Mart doesnt have an extensive selection of food.

[femmocrat]

7. Walmart's regular produce is so awful, I can imagine their "organics".

Teensy shelf-space and a few old dried-up apples. Ugh.

No Whole Foods here, just a gawd-awful Walmart and an little old-fashioned mom-and-pop store.