Who Needs A Whole Foods Market?

Is Whole Foods losing its mojo?

Looks like, yeah.

According to that article, Whole Foods' sales declined 2.5 percent last year, and they're expecting to lose about the same amount this year. Considering that I've never seen a Whole Foods not crowded with people, I'm guessing that's a data point the company is now really worried about.

Whole Foods is rapidly building stores to try and attract customers. From that WaPo article:

"Whole Foods’ challenges are wide-ranging, but one of its biggest hurdles is attracting more customers. According to data from Kantar Retail’s ShopperScape survey, the organic grocer had a 7 percent penetration rate back in 2009 when it had some 273 stores. In other words, 7 percent of respondents in Kantar’s customer survey said they shopped at Whole Foods on a monthly basis. Since then, the chain has been on a breakneck march to open more stores, its fleet now numbering more than 430 locations. So what is its market penetration now, with all those added stores? Just 8 percent, according to Kantar. It’s practically unchanged."

The problem isn't more stores; it's where those stores are located. The chain is clustering stores in the same general location, so they're not adding customers, they're just making moving the existing customer base around.

I'll use my experience as an example. Over the last 13 years, I've lived in three different neighborhoods in northern Virginia. I was in walking distance of a Whole Foods (distinct stores) at two of those locations. The third location now has a store across the street.

I would frequently stop in yet another Whole Foods in DC, which was close to my doctors' offices and the GW campus.

So that's four stores in an area, with no more than eight miles between any of the stores. While I appreciated being able to walk there, when I wasn't in walking distance the drive was no longer than 10 minutes - not exactly a hardship.

I moved to Richmond about a month ago. There's one Whole Foods, and it isn't inside the Richmond city limits.

Granted, Richmond doesn't have as many people as the DC metro area. But with 16 stores for 6.1 million people - that's around one store for every 400,000 people or so. But the Richmond metro area has around 1.3 million people. That's one store for well over a million people.

And that's if people chose to drive (because, yes, that's the only way to get there) 10 or 20 miles to get to the store's location.

I have a feeling I won't, because there is a really nice Kroger much closer (and with less traffic) and a few miles down the road from there, there's a ginormous Wegmans. Plus, Richmond has a couple of other home-grown grocery stores and organic markets.

Lot's of people do just fine without access to a Whole Foods. But if Whole Foods wants to turn around their decline, they might want to try and get access to more of those people.