Whole Foods to launch first national ad campaign amid high competition
Despite the grocer's impressive growth and highly loyal clientele, analysts say the Austin, Texas-based company faces rising competition in every retail food segment, from big-box discounters to mainstream grocers to upstart natural-food chains.
"They are looking at some competitive threats in a way they never have before," said Jon Springer, grocery analyst and retail editor at Supermarket News.
"For a while, they were all alone in terms of natural and organic retailers with a national reach," Springer said. "But more recently there have been stores offering natural food at a better price. That has resonated with consumers. There's been a real flight to value among shoppers."
Analysts said the advertising and marketing campaign is likely to emphasize Whole Foods' effort to lower prices on some items, as well as maintaining and enhancing the chain's reputation for high-quality food.
Plans for the campaign were first announced in late July during Whole Foods' conference call after its release of quarterly earnings. The grocer is expected to announce details of the venture Monday.
"Natural and organic products are increasingly available, but no one does what we do. Our brand and marketing campaign will highlight both our value and values, reinforcing our leadership around quality and transparency in the marketplace," Whole Foods co-CEO Walter Robb said during the conference call.
According to business analytics firm IBISWorld, Whole Foods has an estimated national market share of 2.4 percent in grocery sales, behind King Soopers owner Kroger Co. with 13.9 percent, No. 2 Safeway with 6.4 percent, and smaller regional chains including Publix and Delhaize America.
In Colorado, Whole Foods has a market share of 3.1 percent, ranking it behind King Soopers, Walmart, Safeway, Albertsons and SuperTarget, according to industry tracker Shelby Report.
Each of the competing chains in recent years has made marketing pushes for the sales of organic and natural items.
In Colorado and other national markets, Whole Foods also faces challenges from fast-growing natural grocer Sprouts.
"With Whole Foods' leadership in organics and naturals, everybody is chasing the leader," said Meg Major, an analyst at Progressive Grocer. "They've got to really double down on what takes their organics to the next level."
Source: denverpost.com
