A Whole Foods Turnaround may Get Messy
Whole Foods has been disappointing investors lately and is down on its luck. The competition is moving swiftly while taking share in the organic mindset. Many grocery stores have aisles filled with organic and GMO free foods. So why shop at Whole Foods when you can pick up your organic groceries just about anywhere? Granted the Whole Foods experience is refreshing, it’s different, and it’s fun. That said, grocery shopping is a chore for many people, and with the growing grocery pickup/delivery services, the experience may not matter at all for a host of customers.
Whole Foods differentiates itself by being positioned as very high end. The prices are higher, but the experience is great and people can be sure that they’re getting the highest quality foods that the world has to offer. That said other grocery chains have caught on to the organic trend. Successful chains include Costco and Kroger, which have been dominating the entire industry. They are consistently able to grow and offer consumers what they want at good prices. Though it seems that lately every supermarket sells items that can be found at Whole Foods and they are all nipping at Whole Foods’ market share. If you are already at a grocery store and you see the organic aisle, there’s no point in making a separate trip now to go to Whole Foods.
Walmart is also ramping up its new pickup and delivery service where you can order online, and save hours of shopping by just picking up your groceries in a matter of minutes for a small $3 fee. Time is money, and people want convenience. Why even go shopping for groceries when you can pick up exactly what you want without even walking into a store.
Whole Foods is going to have some trouble taking on the entire industry. It needs all the help it can get. The company should be investing heavily in technology and revamping all of its stores in order to compete on innovation. Instead the firm has stated that they may be buying back a lot of shares with their huge sums of cash. That may not be the best use of its cash at a dire time like this when everyone wants a piece of Whole Foods.