Comments on: Mr. Mackey Goes to London

By: Ted Mininni

Ted Mininni — Wed, 15 Aug 2007 13:01:33 +0000

Nick,
Thanks for giving us an update on how WF is doing in its new London location. You’re right: many companies don’t make successful transplants into overseas markets. On the other hand, as I stated in my post, it takes time to tweak formats and marketing approaches sometimes to get it right for different markets. As is the case with any international city, London is filled with retailers at every level, and getting a share of the pie can take some time, if it happens at all. Thanks for weighing in.

By: madrid

madrid — Wed, 15 Aug 2007 09:37:57 +0000

Well Nick…that shut Ted up !! and of course you are right. The store is dead in the water with few customers mountains of wasting food etc
Heavies at the door and actually only one door when the old Barkers had four entrances..what are they trying to protect ? ! cheese and wine ?

By: Nick Savage

Nick Savage — Wed, 04 Jul 2007 10:15:46 +0000

I look forward to David’s comment after he has made his first excursion, but I’ve made mine on July 2 and my diagnosis is that WholeFoods is in a whole lot of trouble in London.
Symptom #1:
Only one trolley was in use during my hour visit on a Monday at midday.
Symptom #2:
When I checked out my two items for £10, I noticed that most other shoppers had only a few items – mostly a snack for lunch. At this time of day other supermarkets are packed out.
Why are people staying away? They have had a PR blitz and there’s nobody who doesn’t know the shop is open. The high profile site has high visibility. It’s new, everyone likes new. There has been no lull in shopping generally – bombs or no bombs.
Possible reasons:
1. WholeFoods has allowed the perception in its PR that it is ‘Premium Price’i.e. not suitable for a weekly shop. WF can probably get a Premium Price but only after it has customers hooked. They need volume to turn the stock.
2. The offer is not a “Wow”. Harrods down the road has a similar offer. If they wanted everyone to be ‘Wowed’ from the start, as Mr Docotorow says, I am afraid they have failed.
3. One visit is not nearly sufficient to make a detail analysis, but it looked as if too much of the offer was based on US experience not UK practice. To give one example: Portion size looked too big – the locals don’t eat like this.
The retailing scene is rich with failed transatlantic transplants. Walmart failed in Germany, Sainsbury and Marks & Spencer failed in the US. The job is much, much harder than it looks. Wholefoods chose to send over management in late 2004 to run a tiny chain they had bought. I doubt anyone, however brilliant, can learn the ropes of a complex market in such a short time.
What to do?
Bluntly, new management with lots of good UK experience and a relaunch in September.
I assume this store is set to be the flagship of a UK chain – how else will they get economies of scale? This flagship is, at best, dead in the water and at worst sinking. Fresh food stock wont wait around for the customers to turn up.
One last word. I drive past the store daily. I have seen only one lady really weighed down with shopping. Good sign? Not actually, I recognised the lady, she used to work the check out at Sainsburys and must have moved to WholeFoods. Staff sales don’t count.

By: Ted Mininni

Ted Mininni — Wed, 28 Mar 2007 19:25:14 +0000

Thanks for the input, Claire and Ann. Yes, I do suspect WF will be fine-tuning assortments, pricing and strategies once they make a beach head in the U.K. Consumers do expect to pay more for organic, natural and gourmet fare and they expect good assortments. We’ll all have to wait and see how this new store unfolds. Time will tell.

By: Ann Handley

Ann Handley — Wed, 28 Mar 2007 18:52:04 +0000

The US “Whole Foods” is pretty pricey.. I’ve heard it referred to as “Whole Paycheck.” Which always crack me up… because that’s always my experience.
I wonder if the London store’s prices are more competitive?

By: Claire Ratushny

Claire Ratushny — Wed, 28 Mar 2007 17:59:05 +0000

Ted,
Besides offering a quasi-British product mix, I’m curious to see how Whole Foods will market and position itself in Europe. I’ve got a feeling the chain’s product mix, marketing and advertising will be “experimental”–subject to change–and that it will be honed over time to fit the bill. We’ll see.

By: Ted Mininni

Ted Mininni — Wed, 28 Mar 2007 17:51:42 +0000

Thanks, Cam and David, for some great observations. I’m especially interested in your insights as a Londoner, David. You’ve probably hit the nail on the head: “a hybrid proposition will emerge”. I’m sure if Londoners take to the new store, they will eventually put a uniquely English stamp on it. One thing: I would think the location work in WF’s favor since so many other upscale establishments are in the same area. You don’t think so, David?

By: David Blanar

David Blanar — Wed, 28 Mar 2007 16:30:57 +0000

I live quite close to the new shop, it is massive (relatively speaking) which is no mean feat, considering it’s next door to a (cavernous) Gap, Marks & Spencer and a selection of premium women’s clothing shops.
Few American retail experiences survive export unscathed, no matter how closely guarded by their brand masters. Europeans are both sceptical and cynical of the saccharine smiles prowling shop aisles across the US.
In particular, celebrated ‘American service levels’ are notoriously difficult to maintain here and I suspect Whole Foods will find it all-but-impossible to entirely replicate its traditional service offering. It doesn’t mean failure; it simply means a hybrid proposition will emerge, one more palatable to jaded Londoners.
The location is interesting, nestled at the centre of three (very) posh boroughs. I predict tough going for WF; well-heeled customers in this area are already served by a surfeit of healthy, premium shops. And M&S is an institution not easily displaced.
Parking is also an issue, with the congestion charge creeping ever closer. It is a major concern, considering the customer segment to which WF is appealing.
Brits won’t shop at Whole Foods London for the brand, and certainly not because it’s American. However, I won’t have a better analysis until I experience — and pay for — my first excursion.

By: Cam Beck

Cam Beck — Wed, 28 Mar 2007 15:26:44 +0000

Having never studied this part of the market, I can’t say for certain, but I suspect Mr. Mackey has. The fact that he’s investing in a large store there, coupled with his previous successes, is evidence enough for me that Whole Foods probably can be successful there.
We’ll see, though. It’s entirely possible that WF will be hit with some unforeseen contingency for which they never planned or that Mr. Mackey isn’t as bright as I think he is.