Whole Foods' efforts to drop prices are culminating in a disappointing defeat
Business Insider compared prices on 29 items at a Whole Foods store in Richmond, Virginia, to prices on those same items in November 2015.
The total basket today cost $147.77, just $2.26 less than the total cost in 2015.
Whole Foods said in late 2015 that it would start slashing prices after the chain notched its first quarterly drop in same-store sales in six years.
Over the last two years, the company has promised more promotions, as well as broader price cuts.
But little has changed since then. Whole Foods' same-store sales have started falling even faster, and a price check from last year found it was still 15% more expensive than its competitors. Whole Foods' same-store sales fell 1.9% in the most recent quarter, marking its eighth consecutive quarter of declines.
"Whole Foods has made some modest investments in price, but they are nowhere near enough to shift perceptions," said Neil Saunders, CEO of the retail consulting firm GlobalData Retail. "The reductions are also scattershot, and some products are still sold at a significant premium to other grocers. The problem with this approach is that it weakens margins but does nothing to raise volumes, which squeezes profitability. Arguably, it's the worst of all worlds."
Amazon recently agreed to purchase Whole Foods for $13.7 billion, and analysts have speculated that Whole Foods might finally make more meaningful price changes under the e-commerce giant's control.
We found the biggest price drops in the fresh produce, meat, and dairy departments.
For example, Whole Foods dropped the price of a pound of ground beef by 21% to $5.49, and cut organic brown egg prices by 19% to $3.49 for one dozen.
But the cuts weren't enough to fully offset increases elsewhere.
Whole Foods raised the price of olive oil and peanut butter by 49% and 20%, respectively. A 17-ounce bottle of extra-virgin olive oil and a 16-ounce bottle of organic crunchy peanut butter now each cost $5.99.
Whole Foods didn't respond to a request for comment on this story.
The company has said in the past that its higher prices are due to its strict food quality standards, which regulate the use of artificial ingredients, growth hormones, and other additives in the products it sells.
