Last week, Whole Foods Market revealed some of the features that its first UK outlet, at the former Barkers department store, will boast. It's an impressive proposition that includes three upmarket licensed restaurants; a wine bar; a pub selling organic beer; a US-style confectionery department; fair trade products in a Whole Trade store-within-a-store; an Eco store selling organic T-shirts, cotton jeans, baby clothes, linens and towels; and a yoga studio and treatment room.
There will also be 52 checkouts, plus a line director whose sole purpose is to ensure the queues move quickly.
No wonder the UK grocery fraternity has launched a volley of pre-emptive strikes ahead of the store's opening next spring. But are they right to be scared?
Sainsbury's, Waitrose, Marks and Spencer and Tesco have all raised their game on the whole foods front recently.
Witness Sainsbury's broader range of pulses and nuts under its So Organic banner and Tesco's launch in January of 87 healthy products under a new Wholefoods own-label brand. It's surely no coincidence that Tesco recently revamped one of its stores in Kensington to give a far more premium take on the Tesco offer. And M&S has revamped its food hall format - some say in response to the threat. Meanwhile, Tesco is doing "shed loads" around the environment, points out Sue Grist, director
of Egremont Group, so that Whole Foods Market will not necessarily stand apart from the crowd with its strong environment-friendly stance.
But much of this activity has been in response to changing consumer behaviour rather than the threat posed by Whole Foods Market, believes Clive Black, head of research at Shore Capital: "In the past 12 months there has been more of a shift in product composition and nutritional behaviour than over the previous 12 years."
Joanne Denney-Finch, IGD chief executive, agrees. "Its arrival will be a catalyst for further development in a market that is already proactive in response to consumer demand for quality, fresh, healthy food. Consumer trends are driving change in the strategies of domestic retailers, and the arrival of Whole Foods Market is likely to accentuate this."
While Whole Foods Market succeeded in shaking up US retailing, there's no reason to suspect that the UK market will react in the same way, says Robert Clark, director of Retail Knowledge Bank. "In the US, food retailing is more polarised and so Whole Foods Market created its own market and then consolidated it.
In the UK the supermarkets have already consolidated and adopted Whole Foods' offer. Whole Foods stepped into the breach in the US rather like our supermarkets are doing here," he explains.
Jack Sinclair, development director of SB Capital Europe, says that one area UK grocers can improve on is presentation, which is one of the major strengths of the US company's offer.
"Displays cost a lot of money and in the UK the supermarkets have found it difficult to stomach the extra labour costs and wastage. They have continued to use plastic packaging, which is easier for service and logistics. Whole Foods Market will find it difficult [replicating its US presentation] in the UK as the cost of space is higher, but it will certainly raise the game," he predicts.
Whole Foods Market is also seen to have a clear advantage over UK grocery retailers when it comes to customer service and product knowledge, both of which it is renowned for in the US. In an announcement last week, the company said that customer service would be a priority at the London store and with plans for 52 checkouts, it is clearly prepared to put its money where its mouth is.
UK grocers will have to reassess their service standards, says Lyndon Gee, chief executive of the Fair Food Foundation, and this will not only be an issue for the multiples. Other specialist stores will also have to watch out. "If UK Whole Foods Market is run the same as in the US on the customer service side then it will drive standards up at UK independents and may get staff to brush their hair in the morning and not always have people with tattoos and piercings handling food," he suggests.
That said, for all the superior quality of Whole Foods Market's offer and customer service, it has one major Achilles heel: lack of stores. The retailer's impact will ultimately be determined by how many outlets it manages to open here. Since the average size of the stores it opened in the US last year was 49,000 sq ft and its first London store will be a mammoth 75,000 sq ft, acquiring sites that fit the bill won't be easy.
Steve Davies, food analyst at Numis Securities, says that it is important not to overplay the retailer's impact. "With only one store opening next year I wouldn't say that I'd detected a sector that's tripping over itself with nerves. Everyone is looking closely at Whole Foods Market but with it
realistically only likely to open five to ten stores within the next three to five years it will be very small in the grand scheme of things. I live around the corner from the site of the new store, but I'm not sure I'll be using it as my local supermarket," he says.
Even so, Denney-Finch believes that Whole Foods Market could benefit from changes in shopper behaviour now that more people are splitting their shopping into two. "They use a fresh food store for items that require their involvement, and an online service or warehouse retailer for routine, regular purchases and brands with which they are very familiar."
So, while Whole Foods Market seems unlikely to prompt the widespread change in food retailing it has caused in the US, that doesn't mean its influence won't be significant.
There will also be 52 checkouts, plus a line director whose sole purpose is to ensure the queues move quickly.
No wonder the UK grocery fraternity has launched a volley of pre-emptive strikes ahead of the store's opening next spring. But are they right to be scared?
Sainsbury's, Waitrose, Marks and Spencer and Tesco have all raised their game on the whole foods front recently.
Witness Sainsbury's broader range of pulses and nuts under its So Organic banner and Tesco's launch in January of 87 healthy products under a new Wholefoods own-label brand. It's surely no coincidence that Tesco recently revamped one of its stores in Kensington to give a far more premium take on the Tesco offer. And M&S has revamped its food hall format - some say in response to the threat. Meanwhile, Tesco is doing "shed loads" around the environment, points out Sue Grist, director
of Egremont Group, so that Whole Foods Market will not necessarily stand apart from the crowd with its strong environment-friendly stance.
But much of this activity has been in response to changing consumer behaviour rather than the threat posed by Whole Foods Market, believes Clive Black, head of research at Shore Capital: "In the past 12 months there has been more of a shift in product composition and nutritional behaviour than over the previous 12 years."
Joanne Denney-Finch, IGD chief executive, agrees. "Its arrival will be a catalyst for further development in a market that is already proactive in response to consumer demand for quality, fresh, healthy food. Consumer trends are driving change in the strategies of domestic retailers, and the arrival of Whole Foods Market is likely to accentuate this."
While Whole Foods Market succeeded in shaking up US retailing, there's no reason to suspect that the UK market will react in the same way, says Robert Clark, director of Retail Knowledge Bank. "In the US, food retailing is more polarised and so Whole Foods Market created its own market and then consolidated it.
In the UK the supermarkets have already consolidated and adopted Whole Foods' offer. Whole Foods stepped into the breach in the US rather like our supermarkets are doing here," he explains.
Jack Sinclair, development director of SB Capital Europe, says that one area UK grocers can improve on is presentation, which is one of the major strengths of the US company's offer.
"Displays cost a lot of money and in the UK the supermarkets have found it difficult to stomach the extra labour costs and wastage. They have continued to use plastic packaging, which is easier for service and logistics. Whole Foods Market will find it difficult [replicating its US presentation] in the UK as the cost of space is higher, but it will certainly raise the game," he predicts.
Whole Foods Market is also seen to have a clear advantage over UK grocery retailers when it comes to customer service and product knowledge, both of which it is renowned for in the US. In an announcement last week, the company said that customer service would be a priority at the London store and with plans for 52 checkouts, it is clearly prepared to put its money where its mouth is.
UK grocers will have to reassess their service standards, says Lyndon Gee, chief executive of the Fair Food Foundation, and this will not only be an issue for the multiples. Other specialist stores will also have to watch out. "If UK Whole Foods Market is run the same as in the US on the customer service side then it will drive standards up at UK independents and may get staff to brush their hair in the morning and not always have people with tattoos and piercings handling food," he suggests.
That said, for all the superior quality of Whole Foods Market's offer and customer service, it has one major Achilles heel: lack of stores. The retailer's impact will ultimately be determined by how many outlets it manages to open here. Since the average size of the stores it opened in the US last year was 49,000 sq ft and its first London store will be a mammoth 75,000 sq ft, acquiring sites that fit the bill won't be easy.
Steve Davies, food analyst at Numis Securities, says that it is important not to overplay the retailer's impact. "With only one store opening next year I wouldn't say that I'd detected a sector that's tripping over itself with nerves. Everyone is looking closely at Whole Foods Market but with it
realistically only likely to open five to ten stores within the next three to five years it will be very small in the grand scheme of things. I live around the corner from the site of the new store, but I'm not sure I'll be using it as my local supermarket," he says.
Even so, Denney-Finch believes that Whole Foods Market could benefit from changes in shopper behaviour now that more people are splitting their shopping into two. "They use a fresh food store for items that require their involvement, and an online service or warehouse retailer for routine, regular purchases and brands with which they are very familiar."
So, while Whole Foods Market seems unlikely to prompt the widespread change in food retailing it has caused in the US, that doesn't mean its influence won't be significant.
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