Tag Archives: Safeway

If the Name “Whole Paycheck” fits…

Anyone who has visted this blog for a while now, will know that I’m a fan of Whole Foods. While they have their problems, I think that their new take on Supermarkets, especially in how they deal with slotting fees, is innovative and good for the consumer.

Meanwhile, others have argued that they’re too expensive and that their pricing strategy doesn’t do the poor any favors. My previous stance was that if one stuck to the non-impulse items at Whole Foods (The wines, the cheese, the upscale meats), then the prices would be comparible to any other supermarket, specifically Safeway and Krogers. I made this judgement with no hard evidence, and decided to see for myself how accurate of a statement this was.

I created a list of 18 items, which I believed to have been a good list of common items found in several different stores. The list contained the following:

  • 1 lb. Granny Smith Apples
  • 1 lb. Bananas
  • 1 lb. Yukon Gold Potatoes
  • 1 lb. Yellow Onions
  • 1 loaf of sliced bread
  • 1 18 oz jar of peanut butter
  • 1 18 oz jar of Strawberry Preserves
  • Oreo’s
  • 1 lb Ground Beef
  • 2 lb long grain white rice
  • 1 lb Spaghetti
  • 28 oz of diced canned tomatoes
  • 24 oz catsup
  • 15 oz box of Cheerios
  • 1/2 gallon Whole Milk
  • 1 lb. unsalted butter
  • 1 dozen eggs
  • 1 gallon Vanilla Ice Cream

There were some ground rules. I looked for the cheapest product available, but I didn’t scour the store to find them. I didn’t count the consumer card prices, as they fluctuate from week to week. Finally, if a product didn’t have a price listed on the shelf, I didn’t use that as test case. This comparison should be considered anecdotal and not scientific, as there are many market variables not taken into account.

After doing the math, the totals for the above list are as follows:

Safeway: $34.07

QFC (Krogers): $39.21

Whole Foods: $39.82

Conclusion? It seems as if Whole Foods was the Most expensive, but not excessively so. In fact, they were only 61 cents more than Krogers for the same bag of groceries. Of course Both QFC and Whole Foods are both roughly 15-17% higher in cost than Safeway, so keep that in mind.

Does this validate my initial point? I’m not sure. If anything it would muddy my point. Krogers and QFC were both helped by less-than-a-dollar loaves of bread, while the cheapest sliced bread avaiable at Whole Foods was $2.69. But Whole Foods had 79 cents per lb spaghetti, something that QFC would have had at a larger location.

In my own opinion, I think that Whole Foods gets the name Whole Paycheck due in large part to the customers lack of financial discipline when walking through the aisle. Clearly Whole Foods is, at the very least, competitive with pricing at Krogers for day to day items. Where they get you is in the upscale items that pepper each aisle. From gourmet cheeses to hard to find spices, each of these items are up there in cost.


Technorati Tags: Food, Grocery Stores, Whole Foods

Supermarkets and the loss of Customers

There was a fantastic article in the New York Times entitled “An Identity Crisis for Supermarkets” (LI:accidental PW:hedonist)which touched upon several items relating to issues we’ve alluded to here before.

There’s two things that are very apparent when reading the article:

1. Supermarkets know that there is a huge problem.
2. They have no idea on how to fix it.

Oh, they have ideas. Cutting prices is always a good thing, and will always meet with my approval. But the Safeways and Krogers of the world are addicted to cash. Until they get rid of the slotting fees (which are in large part the cause to the higher costs of many items), they’ll only raise the prices of some other product to ensure that others are lowered.

What are the products that they will most likely apply the high prices? The organic and natural food items as well as the prepared foods for quick lunches and dinners. If you think I’m kidding, check out the prices of a turkey sandwich the next time you head to your supermarket – at the last check in my neighborhood, hey were running at four dollars. Considering a person could get a better quality sandwhich at the Subway next door, this pricing model is not likely to last.

Other solutions mentioned in the article are simply ridiculous and don’t address the larger issues. If you’re a company spokesperson, and you’re extoling the virtues of your new olive bar, or are beaming with pride at the fact that you’ve moved your ice cream freezers to the front of the store (to prevent the ice cream from melting you see), then your company is in big trouble.

Because the problem of supermarkets isn’t the lack of olives or that I have to rush home to save my fudge ripple. The problem is trust. I simply don’t trust the Safeways and the Krogers of the world.

I don’t trust them to put quality meat into the meat counter, because they removed butchers from the store long ago. I don’t trust the produce department to have the best tasting produce available, because supermarkets have removed any fruit or veggie that couldn’t sit out on the shelf for longer than four days. Oh, and they replaced knowledgable produce staff with people who couldn’t tell me the difference between a sweet potato and a yam.

Their dairy departments have practices that almost destroyed the small milk producers and the artisinal cheese makers. Oh, and the markets shelf space is up for sale to the highest bidder, rather than to the companies who have the consumers best interest in mind.

Granted, I’m not representative of your typical shopper. I probably put a little more thought into supermarkets than a great majority of people, but I’m willing to bet that trust ranks high on many people’s minds when it comes to supermarkets, even if they can’t communicate why they don’t trust these mega-corps any more.

But who knows? Once they put in their softer lighting and their wood-simulated floors, they may get my trust back. Because clearly that’s why people haven’t been shopping at these places as much as they used to.

You can’t let me into Safeway

(Again from Jack at www.ForkandBottle.com)

I was in Safeway yesterday (cub reporter, taking notes) and came across what I think is a new product: Weight Watchers Chocolate Cake w/Chocolate Icing. On the box it states in a good-sized pt font “Real Food, Real Life, Real Results.ˮ Reading the ingredients, #4 is: Partially Hydrogenated Vegetable Oil (transfat). PHO! Just amazing, huh? No wonder the Weight Watchers website doesn’t list the ingredients of their own food products.

Oh, and let us not forget Newman’s Own “Virginˮ Lemonade. Apparently Virgin is Newman-ish for High Fructose Corn Syrup (HFCS), as it’s the first ingredient after water.

Walking through the Frozen Food aisle, I checked more than a half-dozen unfamiliar products at random. Every one had PHO in them. Except for the frozen vegetables, I wouldn’t have been surprised every single item in that aisle had some amount of transfat. You have to wonder if their buyer refuses to buy products that lack PHO? What other explanation can there be?

Not one cheese in their sizeable cheese section was something I would buy. I can’t recall the last time I found a cheese section that didn’t have even five that I would be happy to eat. This is just inexplicable to me – I guess industrial cheeses really rule the day at Safeway.

There was no milk from either of the main local suppliers, Clover Stornetta and the small one, Straus Family Creamery. I was quite surprised to see the Safeway in-house brand as the only milk you could buy.

Stouffer’s French Bread Pizzas – I remember eating them long ago. A double: HFCS and PHO.

Nestea Ice Tea (half gallon carton): Tea is the fourth ingredient. Glad they put some in. HFCS is #2.

The cereal aisle is divided (labeled) into two parts: “Family Cerealˮ and “Adult Cerealˮ. The Adult part has only about 20 cereals, many of which you can find at Whole Foods, etc. The Family part has all of the HFCS/sugared cereals…are they saying that kids don’t get enough HFCS/sweeteners already? Apparently, too, “familiesˮ can’t live without having chocolate chips in their cereal.

There’s a sizable section for kids drinks that come in Tetra Paks near the checkout area. Every single one of them, from a bunch of different companies, contained HFCS as the second ingredient (water being the first). Just what are parents thinking giving this to their kids to drink?! And yes, kid-friendly beverages in Tetra Paks exist, but not here (…Whole Foods stocks them. So do our local independent supermarkets.).

And the funniest thing: It’s toward the end of Heirloom tomato season here. Still, there’s at least two food weeks to go. I found the heirloom section – 11 tomatoes really well hidden. (Yes, 11 – I’ve never even seen a farm stand with that few.) The funny part: They’re labeled “Emeril’sˮ brand – yes, that Emeril!

Why Whole Foods Matters (or Why Safeway Hurts Innovation )

I’m sorry, did I miss the memo saying that we need to dog pile on Whole Foods? First we had Julie Powell’s article equating shopping at Whole Foods with classism, then we had a post at Chicagoist equating Whole Foods with Wal Mart (full disclosure, I write for Chicagoist’s sister blog Seattlest).

Let me explain, in clear language, why Whole Foods is revolutionary (and i DON’T use that word lightly).

In short, your old-school, massive grocery store chains are addicts. What they are addicted to is something called “Slotting fees”. “slotting fees” are money, specifically money paid to grocery store chains from the largest food producers in the nation. The results of this addiction include a lack of innovation in a majority of food products being sold in our country, and a near monopoly on our food supply by companies such as Conagra, Coca-Cola, Kraft, Pepsi, and other mega-corporations.

Here’s how slotting fees work: There is only a finite amount of shelf space available in any given supermarket. Each supermarket only allots a specific amount of space for any given food item. For example, with soda, any given supermarket will have 5-10% of it’s shelf space dedicated to soda.

Coke and Pepsi both understand how valuable that shelf space is. To their way of thinking, it’s essentially real estate. So Coke will go to the Supermarket chain and say “I will pay you x amount of dollars for 35% of your available soda space.” Pepsi will then say “I too, will pay you x amount of dollars for 35% of your shelf space”. Dr. Pepper/7up will then say “Since I don’t have the resources of Coke or Pepsi, I will pay you a little less than x for a smaller percentage of soda shelf space”.

What this means is that for a new soda company, there is somewhere between 0 and 15% of shelf space for which they can put up a new product. Since these are often new companies, they can afford little or no money for these slotting fees. This puts them at a tremendous disadvatage within the supposedly free market.

And if a new brand gets a little too popular? Well Coke, Pepsi and/or Dr. Pepper can increase their slotting fees in return for more space, leaving less space for the newly competing brand.

This activity doesn’t just happen with soda. It happens with chips, candy, cereal, frozen foods, pickles, you name it.

So where does Whole Foods come into this picture? They’ve essentially told the major food corporations “We don’t want your money. We’d rather give you space only if you adhere to our food standards.” To which the food corporations said “Screw you”. This is why you rarely see the major food corporations represented at Whole Foods.

What Whole Foods has done is changed they way food is supplied to their customers. Instead of the major food corporations dictating which products get put on the shelves, Whole Foods does. The choices that Whole Foods makes are based not only which product gives the best profit, but what the demand for each product is, and if the food product is adhering to their food philosophies.

That’s not to say that Whole Foods is perfect…they’ve got issues with unions than make me uncomfortable. They also may be putting foods on their shelves that may not deserve to be there. But at least there’s a Supermarket company that is not putting profits as it’s sole purpose for existance. Few (if any) other supermarket chains can make the same claim.

This is why I don’t get the recent slams against Whole Foods. Are they being targeted simply for doing something different? Or is it because there’s a level of paranoia against companies that get fairly successful in a fairly short period of time? I can’t answer these questions. What I do know that it’s best to fully understand a company before you start criticizing them.

Oh, and just so we’re clear. Slotting fees are BAD! Learn it and repeat it to all who care to hear it.

The Supermarket is Dead, Long Live the SuperMarket!

If you’re interested in Supermarkets, and the hows and whys of their business, there is an absolute must read in this month’s Gourmet magazine that talks about Wal-Mart and their influence within the Food industry via their supermarket division.

It’d be easy for me to slam Wal-Mart and their practices, but I’ll save that for another day. However, I do want to touch upon a hypothesis I developed that the article helped fueled.

In reading the article, it became clear to me that the supermarkets we grew up with in the 70′s and 80′s are dying a slow death. The article agrees by quoting food-marketing consultant Gary G. Kyle, who stated “I think in that in the next five years you’re going to see the elimination of one or two of the major supermarket chains”, referring to Krogers, Safeway, Albertsons and Ahold.

The reason for this is clear in my opinion. Consumers consider two variables when it comes to purchasing foods: Price and Quality. The old-school supermarkets (best represented by Safeway and Krogers) provide little in ensuring that their consumers receives either. Every product on their shelves are determined, not by consumer preference nor market analysis, but by bribery in the form of “slotting fees”. For those of you unfamiliar with the term, “Slotting fees” are fees that companies pay in order to ensure that their product is not only displayed, but displayed in the best possible way, often at eye level. Take a look at the soup section or the cereal section, and you’ll see this practice in all of it’s glory. Those products you see at eye level? Chances are good that they were put their because companies paid to have them their.

The end result of this is that many products of cheaper value or of better quality are often regulated to the lower or higher shelves. The mega-corporations are often the only folks who have enough money to enure that their product is seen at the same level throughout the country.

There are two supermarket chains at the moment who do not practice slotting fees…Wal-Mart and Whole Foods. I do not think it’s coincidental that these two companies are increasing their market share while the old-school supermarkets are losing. What else do these two new-school supermarkets provide consumers?

Wal-Mart: Low prices
Whole Foods: Quality Products

Each of these companies recognized a segment of the marketplace that had not been realized to its fullest potential and they are both now reaping the benefits of these different approaches.

I’m of the belief that unless the old-school supermarkets adapt, they will continue to lose market share in the retail food industry. Other lesser supermarkets have taken notice of these new-school approaches and are adapting. Larry’s Market, based here in the Seattle area combines both and old-school approach with a Whole Foods approach in many aspects of their product choices. Larry’s the only supermarket in the area that actually sells imported British food products as well as selling higher quality pastas, meats, cheeses and fruits and vegetables. They too have increased their market share, at the expense of QFC and Albertsons.

Slotting fees aren’t the only issue with old-school supermarkets, nor are the new-school supermarkets perfect (Seriously…Wal-Mart has issues that I cannot even begin to list here). But if the old-schoolers wish to maintain their presence in the market place, they will need to adapt to some of the practices of either Wal-Mart or Whole Foods. What better place to start than removing the slotting fees and letting the marketplace decide which products deserve to be on the shelves. Isn’t that what a free-market system is all about?

Food Politics redux

In my recent post linking to Mark Morford’s most excellent column about supermarkets, a reader commented the following:

What does republican have to do with this rant – albeit his point is an excellent one, why politicize it? The dems have taken lots of money from the Safeway/Vons/Albertsons of the world. Starbucks – the Safeway of the coffe industry – is all Dem. So not sure why you have to politicize this. Get over it.

Let me address the statement “not sure why you have to politicize this”, by offering the following links:

  • Washington Post

Now at first glance at the headlines, these stories look as if there’s a group of people simply offering a different perpsective on the obesity epidemic. But when you get into the details of these stories, something becomes very clear. Restaurants and other members of the food industry understand that when people talk of healthy eating, it will affect their bottom line. A smaller bottom line means disappointed investors and stock owners, which means a lower stock price. These companies have a vested interest in preventing people from eating healthy. This is why they have started giving money to lobbying group called the Center for Consumer Freedom .

This group, which also has lobbied for the tobacco industry, is run by Richard Berman, who also happens to own Berman & Co a public affairs group. He also founded two other restaurant-supported groups: the American Beverage Institute, which fights restrictions on alcohol use, and the Employment Policies Institute Foundation, which has argued against raising the minimum wage. For a heads-on review of just who Richard Berman is, read this.

The end result of this? One needs only to look as far as Pennsylvania’s proposed legislation (warning…snarky sign-in required).

My point to ALL of this? I politicize because I feel it’s best to point these things out. I politicize, because the people to whom I give my money politicize. All I ask for is a little transparency. I tihnk it’s important to know that the major players in the food chain…the Monsantos, the Conagras, the Safeways, often make decisions that have the stockholders of these companies in mind, rather than the purveryors of their services…the consumer.

Knowledge may be a dangerous thing, but a lack of knowledge? Even moreso.

Thanks for U.S. Food Policy for the heads up. Book mark his site fer cryin’ out loud

Mark Morford vs. Safeway (and Albertsons, and Giant, and Krogers, and…)

Do I need to tell you how much I love Mark Morford, columnist for the San Francisco Chronicle?

I do? Well I love him, even more so today for putting to words what I’ve long thought about these bastions of republican food dispersal units.

A beautiful snippet:

Remember how when you were a little kid and you drank gallons of pasteurized two-percent milk with your Oreos and you thought it was amazing and good? And then when you reached adulthood you (hopefully) got away from that nasty stuff and maybe switched to nonfat or even (hopefully) soy or almond or rice milk because you learned that milk is for babies and besides, those sad cows are pretty much bathed in noxious hormones and chemicals from birth? Remember?

And then one day you just so happened to be handed a glass of old-school milk and you remembered your happy childhood, so you took a big swig and almost gagged because it tasted like thick liquid phlegm and you were like, “Oh my God, how the hell did I ever drink this crap?” Supermarket Syndrome is exactly like that, except with buildings.

Please, oh please go read the whole thing.