How to Copy Whole Foods on the Cheap -- Just Skip All That Expensive Organic Stuff
It's no accident that Sprouts Farmers Market, a fast growing chain of natural supermarkets, has the look and feel of Whole Foods (WFMI), right down to its polished concrete floors and all-caps green logo. The Arizona-based company is eager to tap into the various impulses that have sent Americans flocking to Whole Foods over the past decade and a half, and its doing so at prices that won't gobble shoppers' whole paychecks.
But Sprouts appears not to understand that the reason people shop at Whole Foods, at least in part, is because the store has actual standards about what constitutes natural, high-quality food. This is not the case at Sprouts, which currently has 50 stores in California, Arizona, Colorado and Texas and is adding more locations every month.
While the chain touts its "fresh" fruits and vegetables that are "bursting with the colors and aromas of the best of Mother Nature's bounty," it carries very little organic produce. What little it does have reminds me of shopping at Walmart (WMT), which sells organic, but you have to go on a hunting and gathering mission to find it.
At the new Sprouts store located not far from my home in Boulder, Colo., the sad selection of organic fruits and vegetables was clustered together at the end of the produce section, almost completely overshadowed by an assortment of over-sized signs making meaningless declarations like "Farm Fresh" and "Natural." On my recent trip, there were no organic strawberries, blueberries or raspberries to be had, only conventional ones, even though it's the height of berry season. And the only organic tomatoes were packages of cherry tomatoes from Mexico.
Sprouts, which started in 2002 and is run by a family with a history in the grocery business, is dedicated to delivering food at affordable, non-Whole Foods prices -- an admirable goal. But if it's not organic and not unique in any other way, then what's the value for shoppers? There are already supermarkets selling fresh produce with a smattering of organic, along with aisles of Kashi cereal and Annie's Mac&Cheese. They're called Safeway (SWY) and Kroger (KR).
Whole Foods has weathered criticism for selling a lot of what co-CEO John Mackey admitted is "junk." But the company deserves credit for maintaining detailed definitions for what it considers to be high-quality food, including a lengthy list of "unacceptable ingredients" and standards for natural and humanely-raised meat.
If Sprouts is operating under similar standards, it's chosen not to share them with customers. The house brand English muffins I bought on my shopping excursion are made with a lengthy list of ingredients -- including high fructose corn syrup, which is clearly not something natural market shoppers are eager to see -- and calcium propionate, an artificial preservative and one of Whole Foods' unacceptable ingredients.
Instead of rigorous definitions, Sprouts seems to favor vaguely wholesome-sounding buzz phrases. The company boasts that it offers "right-from-the-Earth foods," without explaining how exactly they're doing this when most food travels many miles before it reaches a store. And personally, I'd be very interested to known how the fish at my store in landlocked Colorado was "fresh-off-the-boat."
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