Tuesday, April 29, 2008

Eating Chinese, Shopping Italian, Paying Global

Whole Foods "Groceraunt" Pushes Variety to the Limit

Many people (myself included) have a love-hate relationship with Whole Foods. The premier natural foods supermarket does what it does all too well: from the minute you walk into any of the stores to the time you go through the checkout line, you are surrounded by beautiful food in an environment that doesn’t beat you over the head with the fact that it’s a mega-market. But there’s a bit of self-righteous overzealousness in the air, especially as they vacillate between promoting big scale global organics alongside a newly popular "eat local" dictum. It's hard to stay morally pristine when food prices – especially for organics – are rising.

Back in the 1990s, when my local Whole Foods was still a small chain call
ed Bread and Circus, we would often go there for special cheese sampling events, a smoothie from the juice bar, or sushi-to-go. Once we even took friends and had a rather tipsy pre-Thanksgiving all-day tasting of organic turkey, wine, appetizers, desserts, and condiments. When WF took over, they did away with the juice bar and expanded the hot foods section. We got in the habit of stopping before long driving trips, stocking up the cooler with specialty sandwiches, hummus, fresh fruit, cookies, and drinks. Our current Whole Foods competes mightily with a local supermarket, Giant Eagle's Market District, each offering weekly dinners you can take right out the door and serve to your family or guests.

The newest Whole Foods in Scottsdale Arizona takes the ready-to-eat offerings up two or three notches, and comes up with a new word for the approach: "groceraunt." Some folks think this will be a great new term, though for me it brings to mind my grey haired Aunt Iris wearing a grocer’s apron. But even Aunt Iris -- a great cook, mind you -- could never offer so many options, including huge, wide-screen LCD TVs, televising cooking lessons and a station where staff will grill or smoke your fresh meats and vegetables for you. Dinner at my aunt’s house also did not include a Tapas bars, wine and cheese tasting, or seasonal draft beers, all of which the new store offers. Capping things off, The Scottsdale concept store has a pizza making spot, Latin and Asian hot foods bars, and a café with baked goods and coffee.

Given what they’re putting together, I can’t help thinking we’ve already got a name for this: food court. Oh, you say, it’s in a grocery store so it’s different. But people have been shopping and eating in supermarkets like this for at least two decades (and before that, especially if you live in a city and shop in local, neighborhood stores rather than malls!). For people who don’t like fast food, the ability to grab a container of berries from the produce section, bread from the bakery, and then prepared foods is a way of life, not a big surprise.

I’m just amazed that so few of these places have adde
d wireless -- Wegman’s is one of the few that does. Here in Pittsburgh, Giant Eagle has increased its organic and prepared foods, but also gone in the other direction: GE Express are smaller, well placed grocery stores with a reduced set of supermarket offerings, lots of meals-to-go, and a small wireless café, all connected to a discount gas station.

Indeed, the new concept WF will probably do very well in upscale locations like Scottsdale -- areas with many professionals who work 24/7 and have lots of disposable income. But I hope it’s not a general strategy, tipping the balance towards “bigger and more” rather than “specialized and better.” With transportation costs soaring and world-wide concern over key food crops (rice shortages, stalk rust on wheat, subsidized corn production for biofuel, and high priced dairy), all grocers are going to have to reign in some of their expansion.

In one way, WF’s gamble may pay off big, since their clientele have always been willing to pay more for perceived health and prestige benefits. But getting bigger won’t do much for their "Whole Paycheck" nickname, which will only be amplified as prices for organic and conventional foods go up with energy costs.

What’s great about this concept is what’s great about Whole Foods in the first place: good food, good quality and lots of choices. But there must be some limit to the variety that such chains can offer (or that consumers demand). Perhaps I am rejecting both my American consumer and market researcher hats when I say too much variety is simply too much. It all sounds good – but does it really benefit anybody? And will it remain a necessity when producers and consumers are going to have to begin balancing the costs with the growing demand for organic and natural foods? Whole Foods already has the structure and philosophy in place to sell in line with a more local and seasonal approach. The Groceraunt, in its first incarnation, seems to be going in the wrong direction. Still. I’d rather see more of these than fast food restaurants popping up at department stores, malls, and rest stops, but I expect that even a significant growth for the former isn't going to have much of an impact on growth of the latter.

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