It's tough being Whole Foods. Competing fancy grocery chains threaten from one side. Big box stores selling organic food threaten from the other side. "All natural" food will thrive in the most unnatural environments.
Earlier this week, Target announced that it's pushing hard in the "natural" "organic" crapola space—"organic and sustainable products are growing at a 15% to 20% clip" at Target annually. Also this week, Walmart said that it is going to begin selling Wild Oats-branded organic products at all 4,000 of its stores, at prices 25% lower than similar products from competitors.
Even Whole Foods—which pioneered the idea of a grocery chain focused on natural and organic items—is off its game. The company expects same-store sales, a closely watched indicator for retailers, to rise by 5.5% to 6.2% this year, a slowdown from the 7% to 8% growth Whole Foods had long delivered. Its stock is down 11% this year.
Whole Food's fancy grocery store competitors are having a tough time too, even though sales of organic products are climbing steadily. Much of the increased sales are coming from decidedly non-fancy stores like Safeway, Kroger, and the big box stores pushing more organics onto their shelves, rather than from fancier stores attracting huge new numbers of customers. Yes, there is more business to go around. But there is not so much business that Whole Foods will get to rule the world. Sad.
You've gotten what you want, hippies/ foodies/ liberals/ Mark Bittman Facebook fans: organics have hit the mainstream. And they will be used to reap more profits for Walmart, just like everything else. You can't have it all.