business news in context, analysis with attitude

We commented yesterday, about a story regarding communities banning big box stores:

Like it or not, consumers have every right to dictate such conditions for the communities where they live…just as consumers become more empowered every day to take control over the shopping experiences and the foods they enjoy.

MNB user William J. McCollum responded:

Cannot believe that you would even entertain that this is what consumer's want- less big boxes. It is the politicians along with the unions who oppose big boxes because they know that the press will be sympathetic. But if large stores were banned across the country, consumers would see prices escalate due to the lack of competition. It would also mean that many supermarkets would not qualify such as HEB, Wegmans and the newer Giant stores. It is about time that someone pointed out that the main reason why consumer prices have been held in check over the years is because of these "big boxes"--whether grocery stores or discount stores. You say this is what consumers want, but the only reason Chicago aldermen backed down on the no big box ordinance was due to consumer pressure and are the ones who know that these stores provide jobs and more importantly, low prices.

MNB user Randal O'Toole wrote:

You say, "Like it or not, consumers have every right to dictate such conditions for the communities where they live…just as consumers become more empowered every day to take control over the shopping experiences and the foods they enjoy."

I am sorry, but a city or county commission is not the same as "consumers." When those commissions are heavily influenced by labor unions and other opponents to big-box stores, what we have here is one group of people dictating to the rest of society how they should live.

As a consumer, I have far more influence on my grocery store when I shop for, say, organic foods rather than non-organic than I do when I vote in an election. Most consumers make no effort to participate in decisions to ban big-box stores like the ones you cite. (If you don't believe me, just check out voter turnouts.)

The sad thing is that these "bans" on big-box stores are really class based. If IKEA proposed to build in Bellingham or Whatcom County, they would probably be overjoyed. If Trader Joes wanted to build a 75,000-square-foot store, they would offer all sorts of subsidies. Yuppies shop and IKEA and Trader Joes, while lower income people shop at Wal-Mart. Guess who has more influence on politicians: the rich or the poor?

Do politicians have the right to dictate where I shop? Not in the America I grew up in.

And MNB user W. Alan Burris wrote:

I think that your comments “Like it or not, consumers have every right to dictate such conditions for the communities where they live…just as consumers become more empowered every day to take control over the shopping experiences and the foods they enjoy.” confuse two completely opposite types of controls. Consumers are becoming more empowered to control their shopping experiences. But consumers are less empowered to control their shopping experiences when politicians and political activists use legal force to restrict and control their choices of retailers. If consumers don’t like a shopping experience they can close a business by withholding their trade so there is no need for political intervention. Politicians want to legally impose their personal preferences, or the preferences of their campaign contributors, to frustrate and prevent, not to support, consumer control, and they have no moral right to do so.

We would agree in principle that unions and politicians may have agendas other than the community good. Though it must be pointed out that they, too, are citizens.

However, we would completely disagree with the notion that the only way to object to commercial development is to withhold consumer dollars, and that politicians are only trying to frustrate consumer control rather than enable it.

We grew up as part of a generation for which political activism was second nature – and despite the fact that the system can be and often is abused by special interests, we continue to have faith that in the end, citizens should try to exert influence through the political system.

Chiming in on the debate about Whole Foods and what could be shifting priorities and strategies, one MNB user wrote:

Besides the "shopping experience" which is far better and different than Safeway or Wal-Mart, neither Safeway or Wal-Mart will EVER offer the range and quality of food available at Whole Foods. Whole Foods customers don't shop at Wal-Mart any more than Nordstrom's customers shop at Sears. They target different income groups, and a totally different class of customer. Safeway may "try" with their lifestyle stores, but it will take a lot more than window dressing to compete in this area. Safeway's quality doesn't come anywhere near Whole Foods, Safeway (or Wal-Mart for that matter) will only approach maybe 5% of the range of organic, natural foods, and high-end foods that Whole Foods sells. Whole Foods has 30,000 items and the best fish, meant and produces sections available. If Safeway, King Soopers, or Wal-Mart ever get 1,500 organic items in their stores that will be a miracle -- and they have a very long way to go to match quality of the fresh foods they sell. Whole Foods customers know this.

Whole Foods knows this. Safeway and Wal-Mart might be capturing a general market trend toward increased awareness of and interest in organic foods, but they are not going to take Whole Foods customers from them. They are just going to capture the low-end of the rapidly increasing consumer interest in this area. Whole Foods customers can get all the organic, natural and high-quality foods they want and need at Whole Foods -- they can't do that at Wal-Mart (and wouldn't even think of trying) or Safeway. (Not to mention that from what I have seen, for the same item, Safeway's prices are HIGHER than Whole Foods!).

The Wild Oats merger IS good for Whole Foods. Wild Oats was their real competitor. Now, but merging with them, that bit of competition is gone, and they have increased scale and market presence to drive costs lower, and they can fix the under-performing Wild Oats stores for still further growth.

I think your assessment is wrong and based on the mistaken impression of who the Whole Foods customer is and the what their market actually is. Whole Foods isn't threatened by Wal-Mart anymore than Nordstrom is threatened by Sears or K-Mart trying to add a few higher-end things to their stores.

MNB user Susan Kemp also had some ideas about the Whole Foods debate:

“Move to the middle” implies that the Whole Foods experience has become mediocre or common; in fact, they consistently provide an exceptional shopping experience. I live in an area with an abundance of food options—gourmet, natural, specialty, supermarkets. Whole Foods is the only store that consistently surprises me. They have a remarkable cheese department with suggestions on usage and pairings posted. Their meat and seafood counters are wonderful, offering recipes (with related rubs and sauces conveniently displayed nearby) and suggestions from the associates staffing the departments. I can find great private label, organic products and competitively-priced commodity items. Without fail, one of the associates will greet me and engage me in conversation about various products.

I have been shopping at Whole Foods (originally Fresh Fields in my area) for many years. My original mission was to find varied foods for my teen vegetarian—a very utilitarian purpose at the start. While I agree that there is a certain cachet associated with shopping at Whole Foods, there are many of us who simply appreciate the special shopping experience, whether we are soccer moms or trailblazers. I welcome anyone to our “club” and don’t believe that the brand that is Whole Foods is being diluted by their expansion.

(My perspective is that of a consumer who is an organic advocate and a food lover. While I work in the CPG industry, I am not associated with Whole Foods.)

MNB user Sue DeRemer chimed in:

I started shopping in health food stores in the late 70's. Back then they were usually found in downtown areas in the low-rent district. You could get vitamins, minerals, herbal teas, food bars, and "prevention" magazine, which was a small, hard-to-find magazine back then.

Fast-forward to the early 80's, and a health food store opened in my suburban neighborhood. The product range had expanded greatly. In addition to vitamins and minerals, whole grains / seeds / nuts / rice / pasta was available, packaged foods, canned foods, frozen foods and fresh produce. The store was run by a middle aged couple, with a broad knowledge of health foods and alternative medicine. I was first introduced to "free range" meats at this store, as well as organic vegetables (which were purchased from local farmers). But the most important aspect of this store was the friendly, exceptionally knowledgeable owners. It was more than a store, as people would ask questions, talk to one another about the products, etc. In time they opened a lower level with books and hot tea.

Within the past 2 years, the 2 local supermarket chains began their own "health food' sections. One of them is pretty sparse, the other is quite complete, with fresh, packaged and frozen food (but way too many chips / cookies). And all of the local supermarkets now have organic produce.

Last fall, my health food store closed. I was there the last day, looking for bargains, and remembering. I'd shopped in that store for over 20 years. It was about a mile from my house, very handy. And I'd formed relationships with the clerks (who at one point replaced the owners in the store). I actually shed tears as I left it for the last time.

Now I buy my natural / organic foods at the larger supermarket, with the best selection. But I really miss my local health food store. There are no clerks roaming the natural food aisles at the supermarket, and if there were, I doubt they could answer questions, or would have time for friendly conversation. It's just not the same…

I'm thinking maybe Whole Foods is also being impacted by major supermarket chains invading their health food "turf". Perhaps they need to start thinking like a health food store again.

Our MNB Radio commentary yesterday focused on the difference between effectiveness and efficiency, and looked at companies such as Starbucks and Whole Foods…but also reflected on a not-entirely satisfactory trip to DisneyWorld as an example of how efficiency may gain the upper hand (rarely to good effect).

One MNB user responded:

First of all, tisk on you for taking your child to Disney for the first time when she is 12, while you are a “world traveler”….part of the “magic” of Disney, is seeing it through the eyes of a young child. My son just turned 5 and went for his 3rd time this year. We hear the yea-sayers saying why take them when they are so small, they won’t remember it. It’s not about remembering, it’s about the “magic” they see and experience in the moment in the characters, the shows, the laughs on the rides, and the autographs from the characters, etc. As parents we have such great memories of the whole experience with him.

Also, if you were there last week, you saw Disney at it’s busiest. President’s Week is one of the busiest weeks at Disney World, of the whole year. They actually publish this stuff, and what are the busiest days at each park, etc (I have a 2005 book and 2007 book version of you would like to borrow them). We were there a few weeks ago, and I would have to disagree with you on the “wear and tear”. The place is always clean, well painted, and the PEOPLE ARE ALWAYS POLITE. You can not get that experience in too many grocery stores anymore, but still at Disney.

You need to give you and your daughter another shot at Disney, to make up for all those memories you lost, and to give her some more of Disney with her family.

This may sound a little defensive, but we’d like to point out that we took our daughter to Disneyland in California about six years ago…so it wasn’t her first time. And she didn’t see or notice the wear and tear…she had a great time and would probably go back tomorrow.

By the way, on the subject of our Disney criticism, we got one email yesterday that commented on our power and influence…and we must admit that we like emails like that.

MNB user Gary Cohen wrote:

You mentioned this morning about your trip to Disney World not being the best and – wow – within hours – here is the following news release:

“Walt Disney Co. on Thursday said it was planning two big expansions to its Walt Disney World theme park in Florida, including a 900-acre luxury resort and a commercial district outside the gateway entrance.

In a statement, Disney said the luxury resort would be anchored by a Four Seasons hotel and would include an 18-hole golf course and vacation homes. Work on the luxury resort could begin this year, and the hotel is forecast to open in 2010. It will be located along the northeast border of Walt Disney World on the current site of the Eagle Pines and Osprey Ridge golf courses.

In addition, on the western edge of the park, Disney said it would build a pedestrian friendly development with hotels, stores and restaurants. That project, which is in the design stage, will be comparable in size to Disney's Animal Kingdom.

The development, which will center around a retail village, will be built in phases over 8 to 10 years, Disney said.

Rest assured, we have promised to use this power only for good…

Finally, MNB user Glen Terbeek gets the last word with an email he wrote about the difference between efficiency and effectiveness. These are two sentences that every retailer should print out and post on the wall, and then read every day:

Effectiveness is for leaders.

Efficiency is for followers.

KC's View: