Whole Foods is a Little Less Whole…
Whole Foods used to have quite the niche market, meaning there were a select number of people willing to pay a premium price for a natural or organic product. This worked for the company for many years, especially as this idea of healthy living became increasingly popular. They were booming and opening even more stores.
Not Anymore
This is not a happy story for all. The market for organic and natural products has become saturated. I’m not talking about saturated fat, I’m talking about the fact that more grocers are carrying these natural and organic products. Whole Foods now has some competition, and the market is not responding in their favor.
The Second Problem
The second problem with Whole Foods is they don’t have anything unique any more. Grocers like Kroger and Walmart are now carrying many of the organic and natural products that Whole Foods does. Trader Joe’s has 80 percent of their products from private labels, meaning a consumer cannot get the product anywhere else. Trader Joe’s is not allowing the competition to imitate them.
Supply Chain
Whole Food’s supply chain is not exactly straight. Let’s start off with the management aspect of the company. The company has 12 regional managers which optimizes the flexibility of the company. Local food from local farmers, but it creates a lot of cost and headache for Whole Foods, this is reflected in their prices. Trader Joe’s limits it supply chain by selling mostly in-house brands which reduces the number of suppliers. This allows Trader Joe’s to keep consistency throughout their stores and have cheaper prices.
What Does This Mean for Consumers?
If you support Whole Foods, continue to buy from there. Also, you might want to encourage others to purchase from the company. If you don’t care either way, keep buying from whatever grocer you are currently using. Those organic and natural products will still be present at both Whole Foods and other grocers.