The Holy Grail?

Getting an interview with Whole Foods Market is like plaiting fog – it can’t be done. Well, not if you are a business magazine like Checkout that is.
The retailer, and I quote, “has a steadfast policy with regard to interviews for trade publications” – it doesn’t give them, “for competitive reasons”.
Which is sort of bizarre, given the intense media interest and coverage its pending store opening has generated in the UK’s broad sheets and the tabloid press.
Perhaps Whole Foods Market is under the illusion UK supermarket bosses don’t read the Times, The Daily Telegraph or The Guardian for competitive advantage. And, heaven forbid if they sully their fingers across the pages of The Daily Mail or Evening Standard, which are practically based on top of Whole Foods Market’s three newly converted floors of food space in the former Barkers department store on Kensington High Street.
Despite the put back, I have managed to wangle an invite to Whole Foods Market’s preview evening where, I am promised, David Lannon, Whole Foods Market’s regional vice-president, will be happy to meet and have a chat.
Until then, when the wrappers are taken off the most hyped store in Britain, I decided to turn to the industry to gauge opinion on what Whole Foods Market’s transcendence will actually mean.
Opinions, as is their nature, vary. But on one theme – store execution – they are united.
“It will be stunning, stunningly beautiful,” says Renée Elliott, managing director of the specialist supermarket, Planet Organic. “It’s their newest store and they will put everything into it.”
The displays will be awe-inspiring, agrees Simon Dunn, managing director of Product Chain, and a regular Checkout columnist.
“It will be a fantastic theatrical experience and a new way of shopping,” says Michael da Costa, managing director of The Food Doctor, which already supplies Whole Foods Market’s Fresh & Wild stores.
“I expect to be knocked out by the store,” says Simon Wright, founder of O&F Consulting, adding that Whole Foods Market is reported to be spending $7m to kit out the store, three times the average investment in its US and Canadian branches.
Yet, while everyone agrees Whole Foods Market will be a three-storey spectacular, their views on its significance spanned the espresso strength to frothy coffee spectrum.
“It will shake up the market,” says John Shepherd, managing director of the upmarket London food store, Partridges. “There are going to be ripples emanating from this opening for a long time to come.”
Wright is more sanguine, however. “We’re all agog but the media are now saying ‘it’s going to be important, but not that important’. For the chattering classes of Kensington, it will be a talking point for about a week,” he says.
Planet Organic’s Elliott, agrees: “It’s just one store in London,” she says.
While da Costa adds: “It’s a welcome presence but I don’t think the multiples need to be quaking in their boots.”
They may not be quaking, but it is certainly no coincidence the major supermarkets in the local vicinity have refurbished and upgraded their stores and offers in recent weeks and months.
Sainsbury’s on the Cromwell Road, Tesco Express at Gloucester Road and Planet Organic’s Westbourne Grove store are just three stores that have been revamped of late.
“The upgrades are not an accident,” says Wright. “I understand local managers have been given a fighting fund to spend on their stores.”
Critically, since the Kensington branch has been a long time in the planning, Whole Foods Market’s rivals have had ample time to react.
“It’s given all of the other multiples in the local area plenty of opportunity to improve their offer,” says Wright. “If you live in Kensington and like organic food you will be very well served. You could argue Whole Foods Market has had an impact, even before it opens.”
Whole Foods Market’s UK launch could not be more opportune either, coming at a time when ethics and sustainability feature more strongly on consumers’ shopping lists than quality and price.
Local is another key driver. According to Nielsen’s State of the Nation survey (see page 12), local is the factor most likely to sway purchasing decisions.
“Whole Foods Market see themselves as fresh, wholesome food providers and are very into local products,” says da Costa. “You are more likely to get jam into stores if it’s a local product,” he says.
“The usp of Whole Foods Market is the provenance of food, which is not necessarily organic,” he adds. “They’ve taken the debate beyond that into an assurance of provenance, which is what attracts many people. That’s very much what Waitrose has also done, it has always been the one that has gone for the quality of the food.”
The challenge Whole Foods Market presents, says da Costa, is more to manufacturers than supermarkets.
“They won’t take products which are ‘unclean’, with E numbers or trans fats, for example, or products that are not sustainable. They are very strict, which may cause a problem filling the shelves if there are not enough people who are able to supply products with provenance.”
Wright also acknowledges the US retailer’s transparency regarding ingredients.
“They are the only multiple supermarket to have a list of the ingredients which are acceptable and unacceptable in their products on their web site,” he says. “That’s good – it’s being up-front with customers and suppliers about what they will and will not accept.”
Service and, in particular, food service is a further Whole Foods Market differentiator.
“They will be very, very strong on the service side of things and they will do food sampling very well,” predicts Shepherd, who hosts regular product tastings and has developed a Saturday suppliers’ market outside his Sloane Square store. “They will be very professional and could cause us some competition.”
Expected to occupy the whole of the first floor, Whole Foods‚ Upstairs at the Market will offer 11 outlets including pizza, dim sum, sushi, a trattoria and juice bar (source: The Daily Telegraph interview with David Lannon, Saturday 5 May, 2007).
“They will do food service like they do in the US,” forecasts da Costa, “with a whole floor of restaurants. People won’t just go there to shop, they will go there to meet friends, and for lunch. It’s a far more sticky experience and, from what I understand, people spend a lot more as well.”
Da Costa is one of many to hope the Whole Foods Market style of in-store eatery will help to raise standards in supermarket cafés in the UK.
“I don’t understand why they don’t have more cafés they can use for tasting experiences,” he says. “Some are more like old, greasy spoons. Whole Foods Market will raise the food and beverage debate to a new level.”
The excitement and media frenzy around Whole Foods Market’s imminent opening is tempered, however.
“It’s one to watch, but it’s one store,” explains da Costa. “They’ve had a lot of press not least because the Evening Standard and Daily Mail are sitting on top of them.”
Others, meanwhile, suggest Whole Foods Market is displaying more than a hint of arrogance in its UK entry, treating the market as if it were an extension of its east-coast business in the US. Britain is already very well shopped, according to this group.
“It will be fascinating to see how the customer reacts,” says Dunn at Product Chain. “The UK shopper is a canny individual, I can’t see them spending £125 per shop in Kensington.”
Over at Planet Organic, Elliott, who opened her first store in 1995, questions the imposition of a US model in the UK, and especially the central London location.
“At the moment people shop in about half a mile radius to a grocery store – will they [Whole Foods Market] change that? Will they get the numbers through the door? People don’t drive cars to shop as they do in America. The store has no car parking and High Street Kensington is so busy. Whole Foods also offers a huge amount of deli food, but it’s not necessarily a deli culture.”
Meanwhile, Planet Organic is introducing more gourmet food to its range and has handed over its meat counter to Daylesford Organic, buying in a further 300 of its own label lines, not ordinarily available to the trade.
Supply, and particularly supply of organic foods, is another sticking point, for some.
“The chatter boxes and bloggers are saying Whole Foods has supply chain difficulties,” says Dunn. “The whole set up is not like America. We don’t grow everything and transport it overnight and organic is in short supply.”
Wright agrees but adds that sourcing organic food presents a challenge for all retailers in the UK as the market is expected to tip £2bn this year.
“The organic market is growing faster than the UK’s producers’ ability to supply,” he says. “And now it’s bigger that growth is more significant. That’s why all the multiple supermarkets are courting the same UK producers. Customers have made it clear they want to buy food produced in the UK but we can’t produce enough to satisfy demand, which is why imports are creeping up.
“Whole Foods are in the same position, or arguably a stronger position than Tesco or Sainsbury’s, because they need less volume.
“I’m quite sure their ambitions go beyond the UK as well [Whole Foods is reported to be targeting stores in Manchester, Birmingham, Edinburgh and Dublin] and they will need significant quantities of supply in due course, but in terms of getting Kensington up and running, I’m not sure it’s that big a problem.”
Of greater concern for Wright is Whole Foods Market’s labelling.
“It’s often quite difficult to tell what’s organic, what’s local and what’s natural,” he says. “They will have to be very vigilant so as not to confuse customers. Whole Foods, for instance, has own label products that are not organic. They will have to be very careful with in-store signage to make sure that customers get what they think they are getting.”
Then there’s the future of Fresh & Wild. Whole Foods is already closing its Notting Hill store and it has admitted the branches don’t make any money.
“Whole Foods does not really do small stores,” says Wright. “I’ll be sorry to see them go but I can’t see how they fit under the Whole Foods umbrella.”
“I just don’t think they will keep going with them somehow,” agrees Shepherd.
Planet Organic will be a likely beneficiary. With inside market knowledge, and a store in a similar proximity to Kensington High Street as Fresh & Wild’s Notting Hill branch, Elliott told Checkout: “We don’t really compete, we’re pretty far away from that store. Whenever there is competition coming into the market I always say to my team, ‘do what we do best and do it better’. It’s about improving standards and being one-step ahead of the game. We will become the organic specialist,” she says.
For the suppliers and food brokers, meanwhile, 6 June will usher in a welcome new player on the retail scene.
Back to da Costa: “From a personal point of view, The Food Doctor supplies all the multiples and will be equally glad to be supplying Whole Foods because they do have a health agenda which we fully support.”
Meanwhile at Product Chain, Dunn reckons Whole Foods Market will lead a retail evolution.
“They can demonstrate they’ve got all the right ingredients to do what the British health food chains have failed to do over the last few years by sticking doggedly to being vegetarian and never offering meat or fish. Whole Foods Market offers a great variety of choice, really high quality food to go, bread baked on the premises etc. It will be an inspirational addition to our retail fraternity.”
Roll on the store preview, so that I may hear it from the horse’s mouth.