For residents of Detroit, the hot new class isn't spinning or Bikram yoga — it's "grocery shopping on a budget" with Whole Foods, which is opening its first location in the city next month.
Over the last 18 months, Whole Foods, jokingly known as "Whole Paycheck" because of its pricier organic fare, has been educating Detroit residents on how to shop frugally at its stores. Detroit, which is still recovering from the economic crisis, has an unemployment rate of 10 percent and ranks among the poorest cities in the country.
Whole Foods has been working to change its perception as a upscale grocer to attract more customers as it enters communities with a wider range of incomes. The numbers, however, show that its reputation is fairly accurate: Whole Foods' sales per square foot are almost $1,000, in the ballpark of brands such as Vera Bradley and Fossil, according to industry researcher RetailSails. The company, which collected $11.7 billion in sales last year, said during its quarterly earnings call last Tuesday that almost 7 million people visit its stores on a weekly basis.
"Whole Foods wants to be seen as a better value and not necessarily expensive, even though, well – it is," said Allen Adamson, a managing director at brand consultancy Landor Associates in New York. "The key to unlocking Whole Foods in neighborhoods in places like Detroit is to make consumers and potential customers comfortable, and not make them feel like they shouldn't be there…what's good for Whole Foods is healthy, fresh eating is now part of the national dialogue."
According to Amanda Musilli, a community liaison for Whole Foods in Detroit, the classes include such things as a price-comparison game, where people can guess how much a jar of Whole Foods's 365 brand peanut butter costs, then learn the actual price.
"We [try] to debunk the myth that Whole Foods market is too expensive, and then everybody got to take groceries home," she said. "We never considered it marketing, we were just trying to get to know the community ourselves and get to know what the community is looking for in a store."
Whole Foods actually conducts "Savvy Shopper" tours in all of its 349 stores, but since there isn't a store in Detroit to walk through yet the classes have taken place in community centers and churches, among other places.
The company's strategy is akin to what yogawear-maker Lululemon Athletica does in new communities – partnering with fitness instructors and visiting local yoga classes to foster goodwill and market its brand months before opening a new store.
Whole Foods sent Akua Woolbright, who has a PhD in nutritional sciences, to Detroit last summer from Austin, where the company is headquartered, to help turn the new location into what she described in an interview as a "go-to destination for sound nutritional advice." She has given talks to medical school students, parents, athletes and more — often on request — on topics such as healthy eating and decoding food labels.
Woolbright says in some of her talks Whole Foods isn't mentioned at all, but in others she does discuss how to shop the store for less.
"It can be your gourmet food store if you go to focus on fresh-cut flowers, the high-end cheese and high-end wine…or you can shop on a budget by focusing on the basics, the produce, the bulk items and the 365 brand," she said. "If they start to look at the store differently, they'll start to find there's different types of products."
The company categorizes customers into four groups, according to its annual report: Conscionables, Organics, Foodies and Experientials.
As per the report: "Conscionables embody the Core Values of Whole Foods Market; they support social and environmental initiatives and are frequent shoppers who spend the largest proportion of their monthly grocery bill with us. Organics buy organically grown food as a way to maintain their personal health and for food safety reasons. Foodies equate food with love and are frequent shoppers who shop our stores for selection, value and convenience, and Experientials are driven to Whole Foods Market for unique products and special occasion items."
If the Detroit stores performs well, they may need to add another category to that list: budget-conscious.
Sapna Maheshwari is a business reporter for BuzzFeed News and is based in New York. Maheshwari reports on retail and e-commerce.
Contact Sapna Maheshwari at firstname.lastname@example.org.
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