A foodie's paradise, but at premium prices
Judi Bevan wonders whether Londoners will pay up for the cornucopia of groceries at Whole Foods Markets Two years ago the term 'bifurcation' entered the bloody battlefield that is food retailing in the United Kingdom. Experts said the market was splitting between those at the top charging premium prices for premium tucker and those fighting on the price front. A McKinsey report said that an astonishing 31 per cent of British shoppers considered themselves in the premium category. There was, declared the svelte chairman of the Institute of Grocery Distribution, Joanne Denny Finch, room for new entrants at the top and in particular, new entrants with flair. Watching Marks & Spencer and Waitrose gently increase their market share to more than 4 per cent each over the past couple of years has proved her point — but nothing has vindicated her remarks like the opening of Whole Foods Market in Kensington last week.
Despite the original ideals of John Mackey, the American 'hippie vegan' founder, the first impression of the new store is one of luxurious opulence. An 80,000 square foot emporium on three levels, Whole Foods Market in the old Barkers building is a bon viveur's paradise — more Harrods Food Hall than farmers' market. There is not a speck of mud or hint of misshapenness about the gleaming displays of fruit and vegetables lined up with military precision, several feet high. Cleanliness, perfection and freshness are the order of the day, with lettuces kept pristine by a fine mist of water — commonplace in French supermarkets but never seen in Tesco or Sainsbury's.
Fruit and veg, though, are just sidelines. Extravagant, gooey cakes line up by the entrance oozing buttercream icing and the promise of a heavenly sugar rush. Downstairs they are giving away samples from the spacious chilled cheese room three times the size of the one in the fabled Fromagerie in Marylebone High Street.
Every food group comes in multiple choices. You could spend hours here just salivating — or alternatively you could grab a couple of pounds of seared rare roast fillet of beef for your dinner party, pick three salads and one of the aforementioned cakes and job done. The variety is vast. At the bespoke coffee shop there are 17 types of beans which can be roasted and ground to your specification. The long array of salads made in the store include `forbidden fireworks salad', roast fig and gorgonzola and various Middle Eastern concoctions. There are 40 types of sausage, 50 different juices and more than 100 different olive oils. There is also a non-organic cookedfood counter groaning with delicacies.
Honey, vinegar and other esoteric liquids come in bulk from vats with taps. There are nuts of every variety, flaked, shredded and whole. Upstairs is a sushi and dumpling bar, a juice and smoothie bar, a seafood bar — and even a bar bar archly called the Bramley, selling beer and other alcoholic drinks. But whatever you choose there are no bargains in this store. No wonder critics in the US call the company 'whole wallet' — a pastiche of its slogan 'whole foods, whole people, whole planet'.
In 1978, John Mackey and his girlfriend dropped out of university, borrowed $10,000 and launched SaferWay, America's first vegetarian supermarket, in Austin, Texas. It thrived, changed its name to Whole Foods Market and after a string of acquisitions, listed on Nasdaq in 1992. Whole Foods caught the wave of the revolt against 'big food', while supermarkets in the United States were much slower than their UK counterparts to jump on the organic bandwagon.
Mackey realised early on that to be profitable Whole Foods had to aim at the affluent health-conscious customer. 'We're Whole Foods, not holy foods,' he has said. Throughout the 1990s sales grew at 30 per cent a year, making the company a 'category killer' in organic food — although it sells plenty of non-organic as well. Success has changed customers' views of it from a plucky challenger on the moral high ground to yet another profit-hungry giant that wipes out independent shops. Now valued at $5.8 billion, it has been dubbed by critics the WalMart of Wheatgerm and both its like-for-like sales and its share price have slipped in the past two years.
In a parallel with Tesco here, Whole Foods needs to expand overseas to show investors over there it has future growth prospects. In 2005 it bought the Fresh & Wild chain of small organic grocery shops in London for £21 million to test the market, and found it favourable. The Kensington store is the biggest by far of its 195 stores — average size 32,000 square feet — and signals its seriousness about expansion.
Yet, like Wal-Mart, it may find that planning constraints and the high price of sites will hold back growth here, not to mention ferocious competition. Even if it opens 40 stores in the next 10 years, as is its stated ambition, Whole Foods is unlikely to take much business away from Tesco, Sainsbury's and Asda: it is a good 20 per cent pricier, for a start.
The two companies most under threat from the American group are Marks & Spencer and Waitrose, both at the premium end of the market. In the eight-month delay before the opening last week, Marks & Spencer upped the ante in terms of eco-cred with an advertising campaign proclaiming 'Plan A because there is no Plan B': fair-trade sourcing, additive-free everything and more organic products than ever before. Even so, it is worth noting that only 1.5 per cent of total UK grocery sales are organic — indicating that what the British consumer cares most about is overall quality.
Whole Foods has taken that on board and although it has attracted flak for the amount of non-organic produce (which it labels 'conventional') in the Kensington store, purchasing vice-president David Doctorow is unrepentant. 'The main thing is that the food is additiveand trans-fat-free as well as being ethically produced,' he says, muttering about the onerous regulations on what is deemed organic here.
He waves aside the question of whether this store, almost the size of a Tesco Xtra, is going to make a profit anytime soon. 'This is a flagship store and the most important thing is to introduce our brand to the UK market so that British customers can see a very different model of food retailing of exceptional quality and service and where all the stakeholders including the staff and suppliers are treated well.'
Whole Foods Market is a great shop for the wives of the lawyers, media moguls and hedge fund managers of Kensington who can afford to keep a taxi hovering outside or pay for delivery. But for anyone who does a serious amount of shopping here, getting it home is the obvious problem — and will involve parking in a nearby NCP car park. It's unlikely that this store is going to make money for Whole Food shareholders back in America any time soon. John Mackey is casting a large slice of bread on the water — organic of course. It may be a decade before he knows whether it has paid off. Meanwhile, Tesco has been cheekily promoting a range of seeds and nuts at the front of its stores under the banner Whole Foods.
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