NATURAL FOOD STORES - WHAT DOES THEIR FUTURE LOOK LIKE?
Natural food stores are facing more and more competition, both from within the industry and from mainstream supermarkets. Keeping this factor in mind, what does their future look like?
Presently there is a trend towards opening larger stores such as those being built by Whole Foods Markets and Fresh Fields. These stores are complete mini-supermarkets offering both vegetarian and non-vegetarian items. Since they are large stores they can buy items in large quantities and thus offer many sale prices. This obviously presents a problem for smaller natural food stores located nearby. Their volume is smaller and therefore it is difficult for them to compete with these lower prices.
On the other hand these larger natural food stores are presenting a dilemma to "mainstream" supermarkets. When Whole Foods Markets opened stores in Texas, a significant number of Safeway Supermarkets' customers began doing much of their shopping at Whole Foods. Giant Supermarket chain in the mid-Atlantic region recently felt compelled to add a larger selection of natural food products to its stores located near Fresh Fields stores. Both supermarket chains hadn't truly recognized the needs of natural food customers.
The Vegetarian Resource Group recently had a booth at the Natural Products Expo West in California. At a seminar focusing on the future of the natural food industry, a representative from Whole Foods Markets stated that he predicted by the year 2001, natural food stores will be bigger, offer more prepared fresh foods and baked goods, and perhaps include an alternative pharmacy. He also stated that Whole Foods Market has recently opened a store in Chicago where they are able to offer some warehouse marketing — meaning a massive display of one item offered at a great price.
Sixty-two percent of shoppers in natural food stores today have at least a college education, whereas in grocery stores only nineteen percent of shoppers have this much schooling. For educated shoppers who go to natural food stores looking for quality food items, price is important; however, if there's only one natural food store in the area they are often willing to pay high prices for the items they need. If "mainstream" supermarket chains start offering natural food items at a discount, where will the natural food patron shop? Will other supermarket customers make natural foods a regular part of their food basket?
Debra Wasserman & Charles Stahler
Coordinators of The Vegetarian Resource Group
