Another reason I don't like Whole Foods

You may be aware that Whole Foods is trying to buy Wild Oats. I hope it doesn't happen. In court documents it was revealed that:

1. The opening of a Whole Foods store can cut revenue 30% or more in nearby Wild Oats stores.

2. Whole Foods set "ground rules" barring suppliers from selling directly to Wal-Mart. Whole Foods wants its suppliers go through distributors because it raises Wal-Marts costs. (Shades of Wal-Mart's own practices!)

3. Whole Foods documents predicted buying Wild Oats and shutting down certain stores would increase revenue 85-95% at nearby Whole Foods stores.

I'd hate to lose the Wild Oats a couple of blocks from me. The only Whole Paycheck store is far enough from me, I'd never go there.

Albuquerque just lost the Raley's supermarkets this week to a purchase from Albertson's. It was really strange to look through the grocery store flyers this week and there were only two, not three. And, alas, the Raley's near me had the best wine prices, hands down, in the whole city.

Where, oh where is competition going?

So what do we take from that?

1. Wild Oats was not well managed.
2. Companies which are not well managed tend to fail or be eaten.
3. Competition in the industrial-organic sector is higher than ever (Whole Paycheck's big competitor around here isn't Wild Oats, it's the Safeway organic program), which leads specialty chains to consolidate.
4. John Mackey is a hypocritical jerk with baaaad karma.

There are good reasons not to shop at Whole Paycheck (rape pricing, heavy promotion of quack and fraudulent products, mediocre quality), but running the chain according to good business principles and thus succeeding doesn't strike me as one of them.

[Robin Garr]

I'm unhappy with both Whole Foods and Wild Oats because they're crunchy-granola places that market to lefties but quietly yet virulently fight labor organizing, which is bad karma indeed.

But that being said, much as it pains me to agree with Stuart, Whole Foods beats the crap out of Wild Oats - at least in our town - with twice the size and significantly better overall quality. Wild Oats came in first; Whole Foods opened up within a year, only a few blocks away, and immediately proceeded to eat Wild Oats' lunch.

People worry about a one world government. Ironically, it's going to come true via consolidating everything (companies, media, everything) into one mega-whatever. I understand Darwinism, but I decry the growing lack of competition whether or not the eaten doesn't compete as well as the predator.

And I still hate Wal-Mart (speaking of another predator) on several levels no matter how you may feel wont to sugar coat the company and its practices.

Don't decry the growing lack of competition until you've demonstrated the growing lack of competition. You found a particular chain in a particular market sector that got eaten. But the question is competition, not the survival of one particular business. During the time that Wild Oats was having its lunch eaten, was there no other competition? No new players or expansions by other players? I named a BIG one (Safeway) and the strong entry by Walmart into that sector is even more significant.

It strikes me that WO's major problem was the INCREASE in competition, not the reverse.

Just from what we saw here, I'd have to agree regarding the quality of management for Wild Oats. Their store here came and went before we ever saw a Whole Foods.

For a different take on this issue:

Here in Sonoma (town of) we never had a Wild Oats or Whole Foods. But we had a very good, high-quality family-owned "chain" with stores in Sonoma and Glen Ellen, Sonoma Market and Glen Ellen Market, that catered to the eco-granola-organic-tree-hugger-quality set.

Safeway ate into that---but not too much, frankly---and otherwise they had no competition. The store was good, and we shop there a lot. But they also were noticeably more expensive than the Safeway/Albertsons nearby. So we'd sometimes find ourselves getting the "basics' at the big chains and shopping Sonoma Market for the specialty stuff--good meats, fresh seafood, organic produce.

Then a Ralph's shut down and Whole Foods moved in. And say what you will about Whole Foods (and there's a lot to be said), they are masters at marketing, especially visual and attitudinal marketing. When you walk into a Whole Foods you are compelled to shop and buy. All of their policies drive you toward that; and they do it quite well. Certainly works with me.

Now that the original grand opening period of WF is over, we're waiting to see how it affects Sonoma Market. So far it has seriously impacted their business, but we haven't seen whether/how they will respond, or whether the situation will stabilize with room enough for all (I hope that's the case, but am not overly optimistic).

Of course, what would put the nail in the coffin of Sonoma Market is what a bunch of people have been clamoring for in Sonoma: a Trader Joe's. Then they'd be pummeled from both sides of the marketing paradigm.

And the proximity of some popular produce stands and specialty shops cannot have helped. Sonoma is a place where for your top dollar, you can get meat, cheese, and produce from specialists. That's not true of most communities where Whole Foods has opened.

[Robin Garr]

And the proximity of some popular produce stands and specialty shops cannot have helped. Sonoma is a place where for your top dollar, you can get meat, cheese, and produce from specialists. That's not true of most communities where Whole Foods has opened.

It's somewhat true here, and the results have been mixed but overall promising. Wild Oats stayed in business after Whole Foods came, although it's rarely crowded.

One fine local fishmonger closed, citing "increasing competition" as part of the reason, although lease issues were apparently more significant. None of the speciality grocers have closed (although there's been a lot of poor-mouthing), and several of them responded by kicking up their own selection and quality and marketing a little harder. And maybe best of all, there's been a dramatic increase in local farmers, meat and egg producers marketing to the consumer through local shops and weekly produce markets.

Meanwhile, Whole Foods seemed to start out in overdrive but has fallen back quite a bit, reducing selection and dropping a lot of products they had earlier on. Staff seems less involved, and little semi-trivial things like leaving free-food sample stations nasty and buzzing with flies and the overall sense of the store not being as clean or as sharp as before have made it very easy to give WF a pass. When it first opened, I was excited and went in once a week. Now I go maybe once a month, mostly for just one or two things they have that no one else does.

And the proximity of some popular produce stands and specialty shops cannot have helped. Sonoma is a place where for your top dollar, you can get meat, cheese, and produce from specialists. That's not true of most communities where Whole Foods has opened.

You mean like the strawberries right across the road from where I live (Geezerville), where the Asian family picks them just before you buy them, so they are still warm from the sun?

Yep.

Wasn't the Whole Foods CEO recently outed for using a pseudonym online to bash Wild Oats' share value, or am I dreaming?

Yup. He's a nimrod, but the sort of nimrod who has a knack for making scads of money. Karma, karma.

Wasn't the Whole Foods CEO recently outed for using a pseudonym online to bash Wild Oats' share value, or am I dreaming?

Well, and somewhat more significantly, to attempt to boost Whole Foods share value and market presence 'anonymously'.

Let's see....Surprise factor of a major company CEO being an unprincipled and egocentric slime bag?????? I'll go for Zero.

Dagnab it! Ah'm jes a lil' ole' hick from Pennsyltucky, but can someone edercate me why if a nice Wild Oats jes' a couple blocks from me shuts down 'cause of Whole Foods miles aways, I'd be better off? I cain't speke fer Wild Oats in Kaintucky, but the ones in Albukerky are pretty danged nice, klene and lower-priced.

Wasn't the Whole Foods CEO recently outed for using a pseudonym online to bash Wild Oats' share value, or am I dreaming?

Well, and somewhat more significantly, to attempt to boost Whole Foods share value and market presence 'anonymously'.

Let's see....Surprise factor of a major company CEO being an unprincipled and egocentric slime bag?????? I'll go for Zero.

Be surprisin' if'n he weren't.

And yet another take on WF -

The Sacramento Natural Foods Co-op has been in existence for at least the last ten years. The store is near midtown Sacramento and they do a commendable job of bringing in good local produce, high-quality coffee, wine, excellent cheeses, etc. They even compromised their vegetarian ideals a few years back and opened up a meat and fish counter. It had been a financially successful operation until Whole Foods came into town. WF opened a store out in the 'burbs, about 40 minutes away from the Co-op. The Co-op management panicked and did the worst possible thing: they hired on some consultants to tell them what to do about the impending competition. The consultants advised them to immediately expand and they spent a bunch of $$ on market research to indicate where to open a second store. They decided on Elk Grove, a rapidly growing suburb south of Sacto. Being the good hippie types they are, they had to design the new store to be as green as possible from the ground up, requiring much extra money. The store finally opened and, as one might expect, completely flopped. No one in the new suburb had any interest in shopping at a co-op. Meanwhile, the impact of the WF on the downtown store was negligible. Seems that no one was interested in driving 40 minutes in order to pay more for the same food at WF. The Co-op finally closed the Elk Grove store a few months ago after pumping a ton of money into keeping it going. Regular members (like us) have seen a number of membership benefits eliminated and the Co-op management and staff have taken pay cuts. It looks like the place will stay in business, but it's taken a severe hit.

So basically, the mere mention of a Whole Foods nearly caused the collapse of a successful local business. And really, WF had little to do with it.

[David M. Bueker]

3. Whole Foods documents predicted buying Wild Oats and shutting down certain stores would increase revenue 85-95% at nearby Whole Foods stores.

That's not a reason to hate Whole Foods. It's simple logic. The people who want certain types of products have to shop somewhere.

As for competition...at the rate we're going in the USA the old-time robber barons will be back before you know it. (Remember when the government broke up the phone company? Well it's rather quickly getting put back together.)

3. Whole Foods documents predicted buying Wild Oats and shutting down certain stores would increase revenue 85-95% at nearby Whole Foods stores.

That's not a reason to hate Whole Foods. It's simple logic. The people who want certain types of products have to shop somewhere.

Duh. Not by itself. The quote was from an incorrectly redacted court filing document from Whole Foods labeled "Operation Goldmine," which outlines their master plan.

Am I supposed to like all businesses? I don't like Whole Foods. I don't like Wal-Mart. I don't like certain restaurants. I don't like certain pizza chains. And over the years, I haven't liked certain grocery stores. Isn't that my right?

Of course that's your right. I hate 'em, too. It's the fact-claim about reduced competition that I (and others) am questioning.

Good. A judge has cleared the way, and we'll have to wait and see what happens. I just hope the WO near me isn't one on the closing list. I'm always suspicious of fewer players in any market. It's in my DNA.

If I may drift just a bit...remind me again what the big problem is that many folks have with Walmart? Is it mainly labor practices, or does it have to do with their size and tendency to put the smaller guy out of business?

I personally don't enjoy shopping there because it's just too big, chaotic and overall unappealing to me.

However, everyone I've ever met who works for them (and I've met people from clerks to management) says that they really enjoy working there.

Also, I've heard a lot of people decry the bigger chains putting the little local guys out of business, but isn't it true that Walmart and stores like them serve a segment of the population who can't necessarily afford to shop w/ the smaller, local outlets? In driving prices down, don't we, the consumers, benefit in the long run?

I'm no economist, so I'm just wondering aloud here...

Here in the birthplace of Whole Foods (Texas), they are under considerable pessure from two sides:

1. The local Safeway-owned chain has remodeled most of their stores and added hundreds if not thousands of organic and fresher, healthier foods. They are no longer isolated in a "health food section", but interspersed amongst the other brands. Since most people still go there for the basics, it's a significant risk to WF - a bigger one than Wal-Mart posed when they added a few organics.

2. The greatest food store known to man: Central Market (http://www.centralmarket.com/cm/cmAbout.jsp). I think there are seven or eight of these in Texas. It is a new concept from a grocer called HEB. They are dedicated to offering the best quality (not always the healthiest) foods, wines, and beers available. Tour buses bring visiting conventioneers there. If you get to Texas, check them out.

I love fresh basil. Whole Foods basil, since it comes from an organic farm in California, is always wilted and brown. Central Market's, which is grown 30 miles away but not organic, is perfectly fresh and less expensive. Sometimes WF's obsession with organic costs them freshness and/or quality.

Whole Foods is no longer unique. Though I am partial to their sea salt and olive oil ciabatta bread, everything else they sell is available somewhere else - usually for less.

I’ve not shopped at Whole Foods or Wild Oats. Neither has been available down here. But now they are putting in a WF in Sugarland, just south of Houston. Its going to be interesting to see how they stack up against HEB’s Organic Program. HEB has a really good one and the pricing is reasonable. The HEB Central Market uptown is a fabulous, if extremely crowded, store. That alone is enough to make me not shop there very often. Though when we do go, we generally have good time.

Richard

If I may drift just a bit...remind me again what the big problem is that many folks have with Walmart? Is it mainly labor practices, or does it have to do with their size and tendency to put the smaller guy out of business?


I'm no economist, so I'm just wondering aloud here...

Seems to me, K, a question like this on a bb like this may attract a bunch of opinions one way or the other. But opinions aren't information; for that, you might need to ask an economist--make that three economists, so you can evaluate the conflicting answers you'll likely get.