The organic grocery chain may soon be making some operational changes.
In many ways, Whole Foods is fundamentally fantastic: a grocery store offering a wide selection of high-quality and specialty foods, including fresh and prepared items as well. But outside some of the obvious and pettier complaints (no, you can’t grab your Lucky Charms there), the biggest issue that has always dogged the brand is the prices – thus its “Whole Paycheck” reputation. This isn’t even to say that items at Whole Foods are necessarily overpriced: Higher quality (including things like service and ambiance) comes at a cost. However, unless you’re so rich you don’t have to look at your receipt, you know that you spend more money at Whole Foods.
Video: When It's Worth Buying Organic
Things are changing over at Whole Foods, though. Investors – including new activist investor Jana Partners who recently grabbed a nearly 9-percent stake in the company – are looking to turn the struggling (at least by Wall Street standards) brand around, and they’ve added tackling the prices demon to their proverbial shopping list. According to the Wall Street Journal, these shareholders want Whole Foods to cut costs by operating more like a big-box grocer, meaning cutting down on the number of items offered and focusing on national distributors over local products. In fact, back in November 2015, the company brought on Don Clark, a former Target exec, to reevaluate Whole Foods’ operations, but new investor pressure appears to be hastening those changes. (To that end, it's no wonder Amazon was a likely suitor for a buyout.)
Of course, its local focus has also always been part of Whole Foods’ charm. The WSJ specifically cites a survey that showed a quarter of Whole Foods shoppers went to the store in the past month specifically to get products they couldn’t get anywhere else. Co-founder and CEO John Mackey acknowledged that changes to his brand will need to strike the right balance. “Our culture is still very unique,” he was quoted as saying. “What Whole Foods needs to do is to take the best ideas of the traditional supermarket industry and integrate them into our company.” But he later added, “We think there are tremendous savings we can have that we can pass on to our customers with lower prices.” I’m sure for most shoppers that would be nice too. Though you’d hate to see Whole Foods lose its core values, most of us don’t have enough money to, say, buy a 9-percent stake in an $11 billion company.