Whole Foods remains strong during recession
November 8, 2011
By Bethany Suba
Marc Vargas was in between jobs when his neighbor suggested he apply at Whole Foods Market Inc.
Vargas had been working as a baker for some time and was looking for something new.
He started out part-time, moved up to full-time and is now the lead concierge at the Highland Park Whole Foods Market.
One of the services he is in charge of is the Whole Foods Personal Shopping experience. The personal shopping offered at Whole Foods allows customers to send a grocery list to the concierge desk that they will later pick up or have delivered. Customers can do so via phone, e-mail or in person.
“It just makes it a lot more accessible for everybody,” Vargas said.
The concierge service will ask for a specific grocery list, or you can send them what you like, your budget and how much time you have.
“To do this position you have to be a foodie, you have to know a lot about food, and you have to love it,” Vargas said.
The Whole Foods at the Highland Park location has offered the service for a little over five years and Vargas says it has been a hit among customers, but he still believes that many people are unaware of it.
Whole Foods started in Austin, Texas and has spread to areas all over the United States, Canada and some in the United Kingdom. It prides itself on its commitment to the environment and its relationship with its customers.
Liz Burkhart started going to Whole Foods to study at its café area when she was in college. She always loved the lifestyle brand and eventually came to work as one of its national media relations specialists.
She believes that Whole Foods owes part of its success to its values, shoppers and its quality standards for natural and organic products.
“It makes me feel proud to come to work every day,” Burkhart said.
Even with the problems with the U.S. economy, Whole Foods’ sales and profits are both growing at a healthy rate.
In its most recent fiscal quarter, which ended in July, the company’s sales increased from $2.16 billion to $2.40 billion, a difference of $236,600 and a change of 10.9 percent.
Its operating income, which is the profit earned from operations, increased by $25.1 million, a change of 21.7 percent.
Another way to look at how the company is doing is through a common size analysis of its cost of goods sold and the operating income. Whole Foods has been doing a good job of keeping its costs down, helping to boost its profitability. Its cost of goods sold fell to 64.6 percent of revenues in 2011 from 64.9 percent in 2010. As a result, its operating profit margin rose to 5.9 percent, from 5.3 percent a year ago.
“We are very proud of the consistency of our third quarter results which were once again near peak levels,” Walter Robb, co-CEO of Whole Foods, said in the online conference call.
The company’s net income increased by 34.6 percent and Robb said that the healthy cash balance the company has had gave it the ability to accelerate growth plans, increase its dividend and repurchase stock.
Whole Foods keeps adding new programs, such as the personal shopping service, to promote their store and make it stand out among all of the other grocery markets. The company occasionally offers, wine tasting and beer tasting nights, free yoga and keeps its Twitter account updated constantly.
The company’s loyal customers are a large reason why it has been so successful.
Amanda Hughes, a Dallas resident, has been shopping at Whole Foods for over eight years and she says she is a big fan of the company, especially its employees.
“[The employees] in the nutrition area are super knowledgeable, and the produce section is always great,” Hughes said.
Because Whole Foods takes great care to make sure that the products it sells are all organic or reach its quality standards for natural products, the company’s prices can appear to be higher. On one afternoon, a pound of red grapes was $1.49 at Kroger and it was $2.59 at Whole Foods. A head of iceberg lettuces was $1.40 at Kroger and it was $1.99 at Whole Foods.
However, the company still manages to keep its customers coming and Vargas thinks that this is because of all the different specials and discounts they offer.
“If you shop on Wednesday you get both the weekly discount and the market discount at the same time,” Vargas said.
He also said that if you ask anyone in the store what the best sales are they will be able to help you find the best deals on all the products.
“There are major ways to save around the store,” Vargas said.