Tag Archives: Supermarkets

Michael Pollan and Whole Foods

First, Michael Pollan writes a book marginally critical of Whole Foods.

Next, John Mackey, CEO of Whole Foods, responds to Mr. Pollan on their blog.

And now, Michael Pollan responds to Mr. Mackey on his own blog.

Personally, I’m glad both of them are willing to discuss their agreements and disagreements in such a public way.

tags technorati : food Michael Pollan Whole Foods The Ominvore’s Dilemma


Bad News for Supermarkets

According to Meat & Poultry, Restaurant sales are forecasted to reach $511 billion in 2006. Not only that, but the restaurant industry’s share of the consumer food dollar will be nearly 48%.

Why is this bad for supermarkets? Because if people are spending more money at restaurants, they’re spending less at markets for homecooked meals. More money for restaurants means less money for Supermarkets.

Also noted in the article: “As one of the nation’s most aggressive job creators, the industry will employ 12.5 million people in 925,000 locations”.

That’s almost 5% of our population, certainly more if you remove the populations which don’t make up the workforce (children, retired folk, etc).

Technorati Tags: Restaurants, Restaurant Industry, Food, Supermarkets


Whole Foods – Not gettin’ the Love

Shorter Slashfood:

Slashfood: Why don’t you sell our favorite Root Beer?

Whole Foods: Because your root beer sucks.

Slashfood: Hmmph. You’re pretentious!

Whole Foods: (counting their $85 Million profit) Yeah, we get that a lot.

Technorati Tags: Food and Drink, Whole Foods, Supermarkets


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.

Thoughts?

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.


Big Chain Supermarkets vs. Whole Foods

Hi! I’m Jack from www.ForkandBottle.com. Kate has asked me to be her guest writer for the next few days. My posts won’t have her look, style or superior writing ability – but they are on subjects that I think will be of interest to her readers. So here goes…

Big Chain Supermarkets and Whole Foods: How do these opposites compare? Below you’ll find very biased analyses of what I think are the plusses and minuses of the Big Chains and Whole Foods. As you’ll see, I’m not in love with Whole Foods, yet compared to Big Chain Supermarkets, for me, there is only one choice.

Big Chain Supermarket

The Good

  • They’re likely to be open (i.e, long store hours).
  • Clean stores.
  • Recognizable products ie. “ it seems like every big name is there. (Not good to me,  but it is to the average shopper.)
  • It’s not hard to find the store.

The Not-So-Good

  •  Produce: Farmers in Chile must love them, some Central Valley guys, too. Small farmers? Sustainable agriculture? Who? What? Huh?
  •  Employees: Compared to Whole Foods employees, Big Chain Supermarket employees just don’t seem to understand food.
  •  Often the store is so big it takes forever to get an item you forgot, like milk. Also it takes longer to get everything you need.

The Bad

  •  Accepts slotting fees. Big-name producers keep out smaller guys, new guys, etc.
  •  Soda aisle is the High-Fructose Corn Syrup (HFCS) Emporium.
  •  Actually, every food aisle is the HFCS/PHO (Partially Hydrogenated Oils) aisle. I could not find, during a visit today, a processed frozen food that (excluding milk-based products) didn’t contain one or both.
  •  Proudly stocks as many candied breakfast cereals as possible.
  •  In the Tetra-pack drinks (for kids!) section (in the front of the store) all have HFCS as their second ingredient (water is first). Perhaps the ones without HFCS were hidden elsewhere in the store.
  •  Three words: Farmed Atlantic Salmon.
  •  Most products are from big-name producers.
  •  Low cost is always more important than taste, distance shipped, etc.
  •  Fruit & Vegetables look great but many (like those perfect looking strawberries) come up way short in the smell and taste department.
  •  Lack of food standards: Impossible to not get your daily dose of bad ingredients like HFCS and PHO.
  •  Lots of disposable products. One store had a full aisle of them.
  •  Fish department sells fish of questionable origin, catch method, or which is endangered. It’s very sad that the very endangered Chilean Sea Bass (patagonia toothfish) is now “Sea Bass (big letters), Chilean (small letters), wildâ€.
  •  No shortage of over-sweetened products.
  •  No stocking of ecologically safe cleaning products (such as Ecover, 7th Generation).
  •  Abysmal stocking of healthy foods for kids.
  •  Artisanal food products rarely stocked.
  •  No butcher’s department in some of the huge stores. (Can this be true in general?)

The Very Sad (- based on what they stock¦)

  •  They must be assuming kids aren’t getting enough HFCS and other sweetners in their diet, as they seem to offer no alternatives.
  •  They must be assuming that low carb, zero carb, no fat and low fat products are indispensable health products to their shoppers. Watch for No Trans-fat products with less than 0.5g of transfat per serving, coming soon.
  •  They must be assuming that soap, itself, isn’t naturally anti-bacterial. Instead, they have what seems like the complete range of anti-bacterial products “ that remove the good bacteria as well as the bad.
  •  I didn’t find labeling as to which products are GMO. Did I miss it?
  •  The Organic produce and Natural Foods department is always small, filled with less attractive-looking items and priced not-to-sell in a price-conscious store. The organic produce was housed in the mushroom cooler in the last store I was in.
  •  The meats and poultry mostly come from huge industrial farms/plants (that are serious polluters). If you saw the living conditions of these animals, you’d, – well, let’s just say there’s a reason people become vegetarians.
  •  The incredible abundance of ready-to-eat meals discourages people from buying food to cook. Why bother when you can just microwave, etc.
  •  Some unbelievably stupid products stocked. (Weight Watchers products that have partially hydrogenated oils, for example.)
  •  For some products, portions are too big. (Example: Huge BBQ Rib racks are packed two(!) to a package(!!!).)

The Funny

  •  If you regularly shop at Whole Foods you won’t be able to shop at a Big Chain Supermarket as they won’t have practically any of the products that you’re looking for.

Whole Foods

The Good and The Great

  •  Some piece-of-mind about what you’re buying. They stock very few bad or stupid products. This is one reason why their shoppers shop there  and are willing to pay more.
  •  Very good organic produce  both quality and variety.
  •  Their Fish Department is the best of any chain store in the country (that I know of).
  •  Wine Department is superior to most any chain grocery I’ve been to (Larry’s Market in the Seattle area was pretty good, too). The Wine Department varies widely from store-to-store, as each store has its own buyer.
  •  They stock the right diapers and detergents. And not one anti-bacterial soap.
  •  You can buy healthy food and snacks for kids here.
  •  Real foods can be found, like raw milk, raw butter and grass-fed beef.
  •  Carry many artisanal food products, but I feel they have a ways to go here.
  •  Excellent cheese department.
  •  No slotting fees. This enables them to choose what products are in each store. And a much bigger selection of new products.

The Not-So-Good

  •  Sometimes (or is it often?) higher prices for the exact same items found at other stores. I’ve seen the same Del Cabo tomatoes for half the price at Trader Joe’s. (In fairness, I saw those Del Cabo tomatoes priced just as high at a Safeway recently.)
  •  The quality of pre-cooked fish from their deli-area has been inconsistent and discouraging; almost as if it’s not the same fish the fish department has, or that it’s just the oldest fish getting cooked. (This is a standard grocery store practice cooking or marinating unsold fish (or meats)  but I don’t know if this is normal practice for Whole Foods.)
  •  The produce is generally not as good as the Farmer’s Markets. (Certainly not as fresh.)

The Bad

  •  Continues to stock products from vendors such as Hansen’s Sodas and Newman’s Own, both of which still have HFCS in their products (but not all of them) at Whole Foods. Something about being grandfathered in is what I read somewhere. I just don’t understand why they haven’t phased these out.
  •  Whole365 brand eggs are shipped in from Texas(!)(!!!) to Santa Rosa. What Wile E. Coyote came up with that?
  •  Too much produce comes from Chile.
  •  Too much emphasis on stocking products from the big names in Organics that are now mostly owned by Big Food.
  •  Higher prices on some items than even independent grocers, for no apparent reason, other than people will still pay it.

So here’s the thing: when/if you switch to shopping at Whole Foods, it does take time to figure out the hundreds of different products you’ve probably never seen before. (Curiously, the independent supermarkets where I live have a mix of products Whole Foods and ones that the big chains carry.) And there’s some trial and error. For instance, which is the good raisin bran cereal? (It’s Barbara’s¦ it even tastes better than Post!) And if you’re super price-conscious, forget-about-it. But if you care about what you feed your family, it’s hard not to shop at Whole Foods.

Also see Kate’s article on slotting fees, Why Whole Foods Matters (or Safeway Hurts Innovation) from August 9th.

Side note: I’ve love to see a study comparing the weight of shoppers at Whole Foods vs. Big Chain Supermarkets, by age category (healthy weight should be – to actual weight). The study would weigh in every six months over a three year time period. Waving magic wand, futilely.

 


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.