Whole Foods CEO says he is slashing prices on private-label food to battle supermarkets
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Whole Foods CEO Jason Buechel wants to put an end to the grocer's "whole paycheck" moniker.
Just hearing those two words is aggravating, Buechel said.
“We’ve been doing so much work on trying to bring down our prices,” he explained to Yahoo Finance Executive Editor Brian Sozzi during a conversation for Yahoo Finance's Opening Bid podcast (see video above).
Whole Foods has doubled its number of promotions compared to last year and reduced prices on 25% of its items, including 880 products under its private label 365.
“Customers are noticing those changes,” he said. “We’re starting to see folks build up bigger baskets in those areas.”
The move is timely.
Supermarket rivals such as Target (TGT) have recently slashed prices to lure in inflation-weary shoppers. Cutting prices should keep Whole Foods competitive in traffic-driving categories like milk, bread, and canned goods.
Secondarily, lower prices could set Whole Foods apart in what is still an inflationary backdrop for food items.
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Consumer Price Index data revealed that in August, food and grocery prices rose nearly 0.1% compared to July. Gains were seen in meat, poultry, fish, and eggs.
Consumers spent roughly 0.5% more on dairy-related items in August too.
“We want to make sure that we can meet customers where they’re at right now,” Buechel said, adding that consumers “have felt that pinch on inflation across the board, not just in food prices, but in their bills and everything else.”
Whole Foods is also aiming to keep the integrity of its products as it reduces prices.
The chain's longtime policies, such as not carrying goods with banned ingredients and enacting standards around animal welfare, seafood sustainability, and cage-free eggs, have remained.
“At the same time, we’re helping protect our food systems; we’re also providing healthier food,” Buechel said. “We want to be in a place where we can offer the highest quality natural and organic foods at great prices.”
To be sure, the Amazon-owned chain has come a long way from its beginnings as a natural foods grocer serving health nuts bopping about Austin, Texas, in 1980.
Its portfolio now boasts 517 physical stores in the US, 14 in Canada, and five in the United Kingdom.
Buechel said the chain is ramping up new store openings over the next 12 months, especially in the New York area.
Three times each week, Yahoo Finance Executive Editor Brian Sozzi fields insight-filled conversations and chats with the biggest names in business and markets on Opening Bid. You can find more episodes on our video hub or watch on your preferred streaming service.
