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Whole Foods Test Lower Margins in Select Markets

Whole Foods Test Lower Margins in Select Markets


Austin, TX-
By Delimarket.TV Staff

In the wake of recent stock declines, Whole Foods Market plans to test out new waters and experiment with lower margins in some markets.
Whole Foods’ Co-CEO, Walter Robb, presented at the Deutsche Bank Consumer, Retail, Gaming and Lodging Conference, noting areas in which Whole Foods seeks to become more competitive.

Robb said, “One of the thing that we realized during the downturn 2007 is we didn’t have the analytics that we needed to really understand our business beyond the sort of intuitive. We also have a lot more analytics on our customers, and what their pattern(s) are. All these things are very helpful as we navigate going forward,” according to a transcript available at SeekingAlpha.com.

He noted that Whole Foods measures roughly 800 items from competitors on how they perform on the shelf, and the company is looking to expand that figure to 1,000.

"We have modeled some stores that are lower margin to put in certain urban markets, and I think there is some potential there, and you will see us do some experiments around that, just to see what that looks like,” Robb continued.

He stated that promotions will move up from the 12% range, where they have been historically. "I think you can see us moving towards 14%, 15% in promotions, and we are able to track that pretty well. And now we are going to use those more aggressively, whether it’s a one day sale or three day sale.”

Robb also commented, “For example in prepared foods, what you would see is some new under $10 options, soup and sandwich, these sorts of combinations.”

Whole Foods Presentation

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