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The Wall Street Journal reports this morning that Whole Foods is finding itself margin-challenged because it is "offering more discounts and putting more value-oriented brands on its shelves, while also holding prices fairly steady despite its own rising costs."

While the company has been making moves to broaden its appeal and grow its sales, by sharpening prices and opening smaller urban stores, it continues to face economic uncertainty and heightened competition, which makes it difficult to achieve the kind of growth it wants.

Meanwhile, Bloomberg reports that Whole Foods has filed two new trademarks that seem designed for use in various e-tailing enterprises - using its Bread & Circuses name for "mobile and online ordering services," and Whole Eats for "retail and online grocery services."

The story suggests that these moves represent the first steps in Whole Foods moving into online food sales, though the company says that it is only in the "ideation phase."

CEO John Mackey is quoted in the story as saying that Whole Foods is very aware of competition from FreshDirect.com, knows that the pure play retailer prices against it, and is convinced that FreshDirect will be the one to crack the code in terms on online grocery.
KC's View:
My sense is that Whole Foods probably is closer to testing an e-commerce model that they are telling us, though I'm not sure that this is going to address the problem of margin strain.