Is There A Leaner Side to Whole Foods?

When I was in a year-long program at Georgetown several years ago, my breakfasts and dinners consisted of drool-inducing meanderings through the aisles of the Whole Foods Market in Clarendon. For three and four day stints each month, I'd hitch Amtrak north, grab a cheap hotel room and walk back and forth to classes. Coming and going, I'd pass and invariably stop in at the Whole Foods Market. I'd start in the produce aisle and work my way to the prepared foods section. It was, perhaps, the most expensive 30+ days of eating I could have experienced but it was driven by several factors -- my poor spending habits, a desire to eat well, proximity to my hotel and classroom, and an utter lack of competition within walking distance.

As Whole Foods Market prepares to enter the Richmond grocery market later this summer, it's hard not to wonder how the trifecta of recession, geography and a competitive market for markets will impact the long-term success of the store affectionately known as Whole Paycheck to some of its customers in other markets.

The NYTimes reports that the natural/organic food chain is working hard to combat its image as an upscale place to shop. It's had mixed success.

[Analyst Mitchell] Corwin said it would take time for Whole Foods to change that image. “When you walk into these big beautiful stores, it’s hard for a consumer to think that it is a value-oriented type of retailer,” he said.

Andrew Wolf, an analyst for BB&T Capital Markets, said Whole Foods was “a tale of two stores.” He said the grocery items in the middle of the store are competitive if not cheaper than those at other stores offering the same products, mentioning items like Kashi cereal.

But he said that Whole Foods was more expensive on the perimeter of the store, where it sells produce, meat, seafood and prepared foods, items that account for the majority of sales.

“They’ll say the price is higher, but the quality is higher,” he said. “It’s kind of, ‘You get what you pay for.’ ”

With the economy still deteriorating, a big question for Whole Foods is whether even its core customers will continue to pay prices like $6.99 a pound for all-natural, air-chilled chicken breast or $12 for a bag of cherries.

“We’ve seen evidence of people being more careful with their choices,” said Mr. Robb, the co-president, who said that consumers were still buying items like wine and cheese, but perhaps buying cheaper varieties.

Despite the economic turmoil, he said consumers remained intensely interested in health and the quality of their food, where he believes Whole Foods has an edge.

The company’s budget strategy is on prominent display at its expansive store in Edgewater, N.J., which competes with a Trader Joe’s down the street. A tomato-colored “Weekly Buys” flier is clearly visible by the front door, and sale signs are sprinkled throughout the aisles.

Burger patties were on sale recently for a dollar each, while value packages of fresh cod and salmon were a dollar a pound less than smaller amounts purchased at the fish counter.

Still, it was hard to find a shopper who considered Whole Foods a bargain, though many raved about the store’s organic goods, produce, meat and fish.

Incidentally, there will be a Trader Joe's virtually next door to the Whole Foods Market opening in Short Pump.