Retail is Detail
Whole Foods was the subject of a slew of media reports last week concerning its future, including how it is managed (e.g. the new composition of the Board of Directors) and what it is working on to improve operations (e.g. provided an update to a list of Strategic Initiatives that could deliver better returns to its shareholders.)
Whole Foods lost about half of its stock value since peaking in 2013 and incurred a string of negative quarterly comparable store sales growth, with the most recent decline reported last week. So, it isn't surprising activist investors have become increasingly involved. What is also surprising though, and perhaps more so, is it seems that if the company’s managers had made a practice of being shoppers, just like you and me, in Whole Foods stores, it might not be in this challenging situation. (Unknown if they shopped. If they did, wondering what they experienced.)
A Whole Foods opened near me about two years ago. I tried being a fan and being loyal. However, on occasions the shopping experiences were discouraging, (and I'm not focused on the company’s pricing strategies which continue to be widely discussed). Last Sunday morning's shopping trip there reinforced my frustration. For instance, the transaction process from getting on the long line through paying took nearly twenty minutes. This is a peak shopping time in the area, so it is odd that the express check-outs weren't operating. While waiting to checkout my thoughts wandered to the long-gone salad bar at this location.
For a time, there was a section where you could go to a terminal, select the ingredients for a customized salad, go to a cashier and pay for it. The salad bar employee would then put the salad together and a tasty meal could be taken home. Yet, this very simple concept at times became a drawn out maddening task. Guess what happened? After selecting my “greens”— which was romaine I was told that the salad bar didn’t have any romaine. When I asked how could a salad bar at Whole Foods run out of romaine when there was an ample amount of it upstairs for shoppers to buy and to prepare salads at home I was told that the salad bar department is run separately. Accordingly, no romaine and no salad for me, which meant no salad bar sale by Whole Foods. I decided to get a refund and then waited in line for that. I detailed why I wanted a refund and asked that my experience be brought to the attention of a manager so the problem could be corrected. I suspect nothing was passed along because a few weeks later, there wasn’t any romaine at the salad bar. Again! With some charm and a smile, I encouraged the salad prepper to go upstairs to the produce section and bring down the romaine for this salad. This salad process took at least fifteen minutes. Though I had the salad prepared, I decided the “struggle” to do this wasn’t worth it. I wondered if any Whole Foods manager tried ordering a customized salad.
Months had passed since I went to that Whole Foods store. Having lucked out last time, I decided to try again and buy another romaine salad. This time however, I discovered the salad bar was gone. Could it be this area was unprofitable? Did it not meet goals because key ingredients were missing? Was customer feedback solicited as to why it wasn’t generating sales? The salad bar was partly replaced by the deli counter that was once located upstairs. And please, don’t get me started on how long it took me to get help with buying some turkey when it was located up there. It could be I’m a fussy customer. However, on Sunday when I spoke with others on the long line I learned that my shopping peers also experienced trying shopping trips there. One man told me it was his first and last time in the store. I might give this location another try in a few months.
The “Retail is detail” motto might be an operating strategy that Whole Foods could embrace as it moves forward. Managers could be shoppers, just like you and me and they would see the immediate need to focus on the details shoppers want which could ultimately result in building a loyal customer base.