One Red Delicious apple at King Soopers: 40 cents.
One organic, locally grown and pesticide-free Red Delicious apple at Whole Foods: 89 cents.
You’d think that in this poor economy, those higher-end apples at Whole Foods wouldn’t be selling so well.
You’d be wrong.
You also might think that Whole Foods profits would be down, as are the profits of many other businesses. You’d be wrong about that, as well.
That leads me to conclude two things: Not everyone is hurting, and some things are worth paying a little extra for.
My family and I are devoted shoppers of regular grocery stores. I cut coupons religiously, plan menus around sale items, and typically shun items of luxury. Our grocery budget simply doesn’t have much wiggle room for extras, tempting though they may be.
That is, presumably, how many Americans shop these days. With our nation’s unemployment rate at 9.6 percent, it seems we’re a long way from the days of frivolous spending.
But every so often, I venture over to a higher-end organic grocery store. There are a handful of household items we buy there, their pesticide-free merit having been begrudgingly imposed onto my frugal-natured mind. Plus, when they have their specials, prices on some items can be comparable to those at other grocery stores.
On our way to the ick-free shampoo one day, my kids and I passed a tray of samples, fruit- studded cheese from far-away Afghanistan. Some of it traveled thousands of miles only to end up in the ungrateful tummies of my children (“This doesn’t taste like cheese!”). I rejected the cheese and its $17.99 per pound price tag, as well as some granola that would eat up roughly a quarter of my grocery budget if I bought enough to feed my troop.
But in my careful picking and choosing, I was in the minority. Folks around me casually tossed buffalo liver dog treats and gourmet-grade tahini into their carts, along with organic bread and soy ice cream. There was no scurrying to grab on-sale megapacks of toilet paper or buy-one, get-one cans of soup. I saw no one stalking the aisles with fists full of coupons and store ads. In this store, you could almost hear the whispers: “Recession? What recession?”
Yes, I know it was declared officially over in late September, but evidence of that has yet to show itself in my neighborhood, where jobs are still being lost and most luxuries continue to be shunned in favor of more practical needs. Profit margins for grocery stores are generally low, presumably much moreso with many of us in penny-pinching mode.
reports that Kroger, the operating giant behind King Soopers, had a pre-tax profit margin of 0.6 percent last quarter, while Safeway’s was minus 2.6 percent. I thought that surely Whole Foods would be right there with its fellow grocers, squeaking by while shoppers hunted bargains.
Not so. Last quarter, Whole Foods experienced a beefy pre-tax profit margin of 4.3 percent.
There is a lot I appreciate about Whole Foods. The fact that the one in my neighborhood constructs its produce stands out of wood from trees that pine-beetles had rendered otherwise useless is admirable.
The 2007 launch of the chain’s “Whole Trade Guarantee,” which encourages fair wages for farmers in lower-income countries while supporting environmentally friendly farming, is remarkable. The steps Whole Foods takes to promote recycling and composting in its stores are inspiring.
But are warm and fuzzy facts like these enough to enable Whole Foods to sidestep the recession altogether? It certainly seems so. Whole Foods enjoyed a 34.9 percent gross profit margin in fiscal 2006, and it is standing strong at 37.9 percent as of last quarter.
So despite recession, folks all over America have apparently declared in a loud, unified voice: “Lower paycheck be darned! I will buy my bottle of hemp-infused body lotion!”
Last quarter, the icon of all discount spending, Wal-Mart, had a gross profit margin that lagged more than 10 percent behind Whole Foods, at 27.1 percent, according to . Interesting, given that I’ve rarely encountered a Wal-Mart store that wasn’t bustling with shoppers. People are obviously spending their money here — perhaps just not as much as other folks do at Whole Foods.
Somehow Whole Foods has convinced us that putting our scarce dollars toward specialty or luxury items is a good idea. Whether we’re after organic produce, gluten-free bread, or simply a shopping experience that’s like community-service-meets- spa-resort, we are flocking to this store like bees to agave-nectar honey.
Where is the recession? It’s in my neighborhood and at my local grocery store. It peppers my conversations with friends and worries my retirement-age parents. It has severed jobs and is responsible for lost homes.
I’m not sure why exactly folks continue to provide unwavering economic support to Whole Foods at a time when it seems so many are in a scrimping and saving mode. I’ll continue to plan my meals according to my budget, rejoice over the King Soopers coupons I get in the mail, and buy those super-sale items by the cartful. And every so often, I’ll venture into Whole Foods, carefully picking and choosing items that seem to be a bit indulgent.
Goodness knows it may be the only time I get to try that delicious fruity cheese.
Amy Dearmore of Centennial works part-time as a case manager for Longterm Care Options and the National MS Society.
