Whole Foods Is Competing With Traditional Stores Like Never Before
As Whole Foods starts to compete on price as well as quality, traditional grocery stores should be very scared.
The Austin-based chain — once
jokingly known as "whole paycheck" — is increasingly benefiting from economies
of scale, meaning that things get cheaper when it buys in larger quantities, as
Kyle Stock points
out in Bloomberg Businessweek.
With lower prices and more sales, Whole Foods has
been able to penetrate smaller or less affluent cities, like
South Bend, Indiana and Detroit.
The brand still has a ways to go,
with 349 stores compared to 1,678
for Safeway and 2,435
for Kroger, but it's getting there.
The stock market agrees. Whole Foods
stock trades at a 38.35 price-to-earnings ratio, compared with Kroger's 12.51,
which means that investors expect quite a lot more growth.
At the same time, Whole
Foods maintains the highest sales per square foot in the industry.
"If we can be relevant on price, we can get to the
quality conversation that we really want to have," co-CEO Walter Robb told
Fortune.
Read more: http://www.businessinsider.com/whole-foods-changing-prices-2013-5#ixzz2Stt7cSEt
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