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How Whole Foods needs to cut prices

Whether it's deserved or not, Whole Foods Market has the reputation of taking a "whole paycheck" to shop there. The natural grocery's leaders say they have received the message and promise to cut prices to compete. One analyst talks about how Whole Foods should approach price cutting.

Christine Kapperman, Senior Content Director

June 13, 2014

1 Min Read
How Whole Foods needs to cut prices


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After Whole Foods Market’s co-CEOs reported they’re willing to compete on price, Rafi Mohammed wrote an interesting analysis for the Harvard Business Review that all health food store owners should read and consider.

Does everyone need to reduce prices to compete in this heated grocery market? No. But the advice Mohammed offers extends beyond dollars and makes sense.

Mohammed writes:

"(John Mackey) wants to simply lower prices to 'hopefully get a lift on that item as people purchase more of it, and the overall perception of your basic price value ratio is improved, and it helps your overall sale.' This statement reflects a fundamental misunderstanding of the scale of the pricing problem and the efforts required to fix it. A lackadaisical price slash of, say, five-to-ten percent is a slow-boat-to-nowhere strategy."

He says Whole Foods Market needs to:

  • Activate dormant customers.

  • Take concrete pricing actions, not tinker with pennies.

  • Consider produce promotion.

  • Publicize private label products.

Slashing prices, for most natural products retailers, is not a top strategy but pricing is always important to review.

Here are some resources to help you make sure you are pricing your products right and boosting basket size:

From EDLP to hi-lo, a pricing strategy breakdown.

3 strategies to increase your ROI using category management.

7 merchandising strategies that increase category sales.

About the Author(s)

Christine Kapperman

Senior Content Director, New Hope Network

As the senior content director at New Hope Network, Christine Kapperman combines her 20-year journalism background with her passion for business to cover the natural products industry for and Natural Foods Merchandiser magazine. She also led content at She loves tracking (and tasting) trends as she shares what’s next to show up in cups, plates and in pantries across the United States.

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