Is The One-Channel Approach Sustainable For Whole Foods?

By Hannah Ash, contributing writer

Whole Foods has long had a decentralized approach to retail sales with many key decisions left to the store leadership team’s discretion. In March, Instacart began offering delivery services to regional grocery stores as well as to certain Whole Foods in the Boston market. Delivery, like the grocery chain’s website, is not yet universal from store to store. Without an omni-channel approach, Whole Foods appears to be at a disadvantage in the grocery and organic wars taking place on that national stage. As retailers such as Walmart and Kroger expand their product line and omni-channel amenities, Whole Food’s current one channel approach to retail stands in sharp opposition to its competitors. As today’s shoppers continue to demand more convenience and fluid shopping, Whole Foods lack thereof could signal a dethroning ahead for the self-appointed king of natural foods.

Whole Foods was able to establish itself as a store that offered health-conscious consumers the natural and organic products they couldn’t buy elsewhere. As the competition adds more and more organic products into its offering, how exactly, branding aside, Whole Foods will keep ahead of the game in the face of the competition’s built-in convenience features such as home delivery and mobile ordering, is debatable. Last month, for instance, Walmart significantly expanded its organic product line by partnering with Wild Oats; over the next few years, the retailer will be offering Wild Oats products at all of its 4,000 locations. Kroger offers its shoppers the Fresh Fare concept. In both appearance and product line, Fresh Fare is similar to Whole Foods; in omni-channel convenience, Fresh Fare is leaps and bounds ahead as it leverages Kroger’s strong multi-channel approach.

Without convenience, strong branding may not be enough for the retailer to stay relevant. A recent survey conducted by Web-based foodie magazine The Daily Meal placed Trader Joe’s as respondents’ number one grocery store of choice (Whole Foods placed at number two). Though Whole Foods did take steps to file for a series of online-related trademarks in February 2013, the retailer has been silent on further developments in this arena. While Whole Foods clearly enjoys a loyal consumer base, it’s not ironclad. On December 31, 2013, Whole Foods reported a trailing yearly revenue of 13.3 billion. Kroger, meanwhile, reported a trailing yearly revenue that had jumped from $94 billion in October of 2012 to $99.3 billion in October of 2013.