Posts Tagged 'Fresh Market'

Whole Foods and Trader Joe’s: It’s not just about “organics”

In a recent RetailWire panel discussion, I comment on the growth of national and regional grocers taking a strong position on organic or “natural” foods. The question is whether “organic” is sufficient as a brand position to take on Whole Foods and Trader Joe’s. But the bigger issue is whether “natural” is even the key to these two chains’ success. Here’s my point of view:

I question the premise that TJ’s and Whole Foods are successful because they are merely “organic grocery” retailers. So chains trying to crowd into that space (which also has plenty of competition from the big national grocery stores) need some brand differentiation in order to succeed. Fresh Market is another growing chain with a smaller footprint than a typical Whole Foods store.

There is not necessarily anything “natural” about Trader Joe’s well-edited assortment of private-brand packaged and frozen foods. Whole Foods is a lot more than its “organic” positioning because of the “foodie appeal” in its fresh meats and produce. So competitors looking to gain share really need to understand why these two chains are excelling.

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Beyond Whole Foods?

The following comment from RetailWire points to Trader Joe’s and Fresh Market as a couple of grocery concepts taking a different tack from Whole Foods. Based on my observation of both stores, they have done a good job differentiating from each other, too:

I wouldn’t describe Fresh Market or Trader Joe’s as “natural food chains,” precisely…but they both serve a different market than a conventional grocery chain or supercenter. (And they both differ from Whole Foods in some key ways, including their location strategies.) Both stores offer tightly focused assortments in relatively small footprints, and neither store is trying to compete in the low-margin world of the traditional food retailer. (Joe’s specializes in a vast array of its own packaged goods, Fresh Market in produce and other categories meant to be cooked and eaten today.) Both stores have a chance to expand and thrive if they stick to their brand positioning instead of aspiring to be “the next Whole Foods.”

Grocer of the future?

As with my last post, some discussion topics on RetailWire focused on food retailing have equal application to general merchandising:

There may not be one “grocer of the future” prototype, but there are at least two trends at work that are also going in the general merchandise world:

1. The “barbell effect” is driving sales for huge, low-priced stores like Woodmans as well as grocers like Whole Foods and Wegmans focused on assortment and service. Those in the middle are the ones losing share, unless they develop a clearer point of view one way or the other.

2. “Smaller is better”: Some of the fastest growth in the grocery industry is coming from stores like Aldi and Fresh Market, both offering tightly edited assortments in small footprints even though they offer different price points. It’s the same trend that is driving big box and discount stores to develop newer, simpler concepts.


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