Magazine article Marketing

News Analysis: Whole Foods Eyes the Everyday

Magazine article Marketing

News Analysis: Whole Foods Eyes the Everyday

Article excerpt

The US retailer, yet to turn a profit at its London store, is adopting a more mainstream strategy.

Whole Foods Market, the US grocery chain, arrived in London's affluent Kensington High Street last June to a fanfare of publicity. The 80,000ft2, three-floor former department store, boasting in-store restaurants, cookery classes and extravagant window displays, was hailed as the harbinger of a revolution in the way UK supermarkets sell food.

Just one year later, however, analysts say the early customer traffic has trailed off at the natural and organic foods specialist's flagship store, which is repositioning in an attempt to shed its image as a grocer for special occasions. It is launching a campaign to promote itself as a shop where consumers can buy everyday goods to compete more effectively against Waitrose and Marks & Spencer.

Whole Foods Market - often referred to in the US by the nickname 'Whole Pay Check' - is also ramping up its price promotions. However, many retail experts believe that the retailer, whose motto is 'Whole foods, whole people, whole planet', will struggle to compete in this arena in the UK.

High-risk hurdles

Whole Foods Market's change in positioning is not without risks, according to Simon Threadkell, creative director at design agency Fitch, which has worked with Tesco and Asda's owner, Wal-Mart. 'It is at a major disadvantage because of its lack of heritage in the UK,' he says. 'Both Waitrose and M&S have longstanding histories in the country, so it will always be playing a catch-up game.'

He also believes the store can no longer compete on product offering alone, because of the strength of supermarket own-labels, which are weakening claims on indulgence by premium brands, as well as closing the gap between the more upmarket chains and major multiples.

Tesco and Sainsbury's have both boosted their premium own-label offerings; Tesco Finest, worth pounds 1.2bn, has overtaken Kellogg as the UK's biggest grocery brand, with Sainsbury's Taste the Difference close behind.

Morrisons, meanwhile, is overhauling its premium own-label The Best, while The Co-operative is expanding its Truly Irresistible brand. The latter is also building on its ethical positioning as part of a strategy to re-establish itself as the UK's leading fairtrade retailer.

'Not only do these supermarkets have rival products sold generally at lower prices, but they are easier to shop in,' says Threadkell. 'Whole Foods is great for bits and pieces and a nice lunch, but it's too Disneyland without being unique. …

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