Whole Foods a Loser in London
Whole Foods Market arrived in London last year with a bang. The Americans couldn't wait, the Brit's were curious and the press was out for blood. The place was huge with 500 employees and 3 floors of products and restaurants and crowds of people. Whole Foods predicted that they would be opening 40 stores around Britain. But one year later the store reported losses of 9.9M pounds ($18.4M) this year in the UK. It seems that the shoppers weren't buying--they were just looking. People went to see it once and then went back to their own supermarkets, in their own neighbourhood, to do serious food shopping. As one critic said "it's too Disneyland without being unique."
Where did it all go wrong? It is very expensive to shop there. To be fair, there is a decline in organic food shopping due to the poor economic conditions. Shoppers are looking for bargains, doing comparison shopping and going to cheaper food stores. Plus, the organic market in Britain is very well developed and has a strong loyalty. Waitrose and Marks & Spencer and Tesco have all been selling organic goods for years and have strong ties with the local farmers. People know and respect the brands that they sell. As one critic put it: "in my opinion, Whole Foods underestimated the UK market. Its core business - natural and organic foods - is a category commonly found in the mainstream supermarkets and generally at a lower price. Whole Foods' lack of differentiation, high prices and relatively limited brand exposure are true weaknesses it needs to address". :: Guardian