Op-Ed: The grocery chain wars prove that the modern supermarket model isn’t sustainable
From Whole Foods founder to Walmart to Kroger to Publix, people with the same idea about our food system have been trying to kill it.
They aren’t alone. Even many supermarkets—one of the world’s most successful—are struggling to adapt to a shifting economy that is now focusing more on convenience and efficiency than fresh fruits and vegetables in the grocery store. And some of their owners and investors are finding it difficult to adapt, too.
Whole Foods founder John Mackey and his company have been in business for more than 30 years, and have revolutionized the way that people shop for food. Whole Foods began as a natural food store for people with limited means. Today, the company’s philosophy—that the food you buy will be good for your body—has made it a world-renowned retailer that sells everything from organic to ready-made frozen foods to cosmetics.
Whole Foods stores in its two signature locations, a sprawling distribution center in the San Francisco Bay Area and a huge warehouse in Seattle, are the world’s largest purveyors of non-GMO food, the world’s largest grocery chain with more than 1,600 stores in 40 countries, and the third largest company to have ever been listed on the Dow Jones Industrial Average. And they’re also the world’s most profitable.
In the U.S., Whole Foods Market is responsible for more than 25 percent of the grocery market. But as more people choose online shopping, and consumers increasingly rely on online reviews to make their purchasing decisions, Whole Foods has struggled to adapt to shifting consumer demands. In the U.S., sales at its flagship stores fell 8.4 percent in the fourth quarter of 2012 and 7.5 percent in the last quarter of 2013. Last year, as people began to shop online, sales at the company’s Whole Foods Market stores dipped 1.8 percent, compared to an average annual increase of 2.2 percent, according to The Wall Street Journal. Analysts have estimated that the long-term sales growth for the company will be less than 4 percent per year. In its 2012 annual report, the company said it expects to turn profitable