The shortage of time for many consumers may also reduce foot traffic at Whole Foods: consumers who used to stop at Whole Foods for specialty items but do the bulk of their shopping at a mainstream supermarket may eliminate their trip to Whole Foods, if they are working longer hours to make more money. Time-pressed consumers may also have less time to linger while shopping.
To some extent, by offering only organic foods, there is a limit to how much Whole Foods can reduce its prices: because of the nature of organic food, it costs more to produce than food produced by more conventional methods: it is more labor-intensive. Thus, there may be an intrinsic barrier to how much Whole Foods can compete, given that it cannot offer organic produce at a discount, but make a profit off of less healthy items. It may be limited to only expanding into relatively affluent or boutique areas. It cannot really compete upon price with its mainstream competitors, unless it was to radically change its image and offer non-organic, cheaper foods.
Opportunities
In addition to organic foods, Whole Foods offers a variety of natural international foods and gluten-free and allergen-free foods, the latter of which can be difficult to find in many areas of the country, despite the increase of celiac disease and food allergies.
Consumers wishing to eat more healthfully often do not have time to cook, given the demands of modern life: Whole Foods offers organic prepared meals, as well as basic ingredients, unlike some of its mainstream competitors. Its selection of ingredients is also much larger. For example, a health-conscious...
Few other supermarkets, even those who offer organic items, can boast such a selection.
Threats
In 2008, over 75% of stores offered organic foods: Whole Foods is no longer the only 'organic' game in town. Also, discount organic venues have emerged, like Trader Joe's, that offer more in-house discounted brands and have a lower price point than Whole Foods. Trader Joe's has expanded into Manhattan and a number of areas where Whole Foods' likely consumer demographic resides.
How to use its strengths and opportunities
Whole Foods, since it is no longer the only store that offers a wide range of organic foods, must look to capitalize upon other unique aspects of its store experience. Getting consumers to come for free cooking demonstrations and workshops on eating more healthfully might draw a wider consumer demographic, including those 'pinching pennies' but still desiring to eat more healthfully. For upscale consumers, expanding its offerings of international products would give it an edge on its lower-priced competitors. And expanding its range of prepared foods and in-store cafes would encourage consumers worried about the ingredients in fast food, who still do not have enough time to cook, to eat at Whole Foods.
