Whole Foods is making it easy for customers to see the week's specials, with "hang tags" placed strategically throughout the store.

Organic fruit, wild-caught salmon and certified flowers may still line the aisles of Whole Foods nationwide, but, according to an Aug. 2 New York Times story, the rotten economy is threatening to spoil the high-end grocer's bottom line. In response, Whole Foods is trying to recast itself in an unexpected role: a place for bargains.

Since early 2006, Whole Foods Market's stock has decreased by more than 70 percent. And while that drop isn't entirely pegged to recent economic crises — including those in mortgage and lending industries — dismal economic forecasts haven't helped the swanky grocer and onetime "Wall Street darling" draw in customers.

To counteract the decline, the company is now "offering deeper discounts, adding lower-priced store brands and emphasizing value in its advertising," according to the story. That emphasis in the store means samples of designer cheese now share the aisles with grab- and-go sale lists. The hang-tags (on recycled paper) list about five reduced-price items, with amount saved as obvious as any Safeway insert (see photo).

"We are a lot more competitive than people give us credit for," said Walter Robb, the company's co-president, who dismissed the company's  popular nickname, Whole Paycheck, as unfair. "We challenge anyone on like items."

A recent national survey "found that 20 percent of shoppers have changed where they buy groceries and household essentials because of the economy," according to the story. That's a trend that could have repercussions beyond gourmet markets such as Whole Foods, since many supermarket chains have been adding more expensive food and gift items over the past several years — often in an effort to compete with high-end grocers.

"It's becoming clear that this worsening economic environment is having an impact on consumers at all economic levels," said Mitchell P. Corwin, an analyst at Morningstar. "The Whole Paycheck image can really hurt you."

Try this:

Cater to budget-conscious (which describes even the most deep-pocketed ones) with a weekly "special" (or a "happy hour") featuring in season or simply in abundance flowers. Be sure to promote it in your signage, direct mail and e-newsletter.

--Mary Westbrook
mwestbrook@safno.org

 


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