Financial crisis is spoiling organics

A Whole Foods Market in Chicago

TEXT OF STORY

Kai Ryssdal: With the economy slimming down every day, you'd think Americans would be trimming their food budgets, too. And there is some evidence that's happening, at least at the high end of the food chain. Whole Foods is cutting back on expansion plans as it responds to a more frugal shopping public. From the Marketplace Entrepreneurship Desk at Oregon Public Broadcasting, Mitchell Hartman reports.


Mitchell Hartman: When Whole Foods reports its quarterly earnings on Wednesday, analysts expect to see sales growth between 0 and 1 percent. A few years ago, sales were increasing in the double digits. Whole Foods has already cut back on plans to open new stores nationwide. That's not surprising, with customers like Alison Lord. I met her outside the Whole Foods store in Portland.

Alison Lord: I'm much more conscious of prices and price comparison, and thinking, "Do I really need that item or not, or can I make it work with something else?"

Which is not to say that consumers are ready to throw in the towel on organic food. What they are doing, is buying in bulk from organic wholesalers or shopping more at Whole Foods' competition -- lower-cost local grocery chains and food co-ops. Barth Anderson is a director at The Wedge food co-op in Minneapolis. He says business is up.

Barth Anderson : It's wonderful, actually. The downturn in the economy has really brought a lot of people home. They don't say, "Well, we're going to order a pizza." They actually cook.

But, will they keep buying more expensive organic ingredients to do that cooking? Sam Fromartz thinks they will. He's author of the book "Organic Inc."

Sam Fromartz: Consumers, if they really believe in the value of organic foods, they're going to continue to buy it because it's what they're putting into their bodies. So, they're going to cut back in other areas. They're going to try to get them for as cheap as they can.

Which means, says Fromartz, shopping more at mainstream groceries that have added organic lines, like Safeway, Kroger and Wal-Mart.

I'm Mitchell Hartman for Marketplace.

About the author

Mitchell Hartman is the senior reporter for Marketplace’s Entrepreneurship Desk and also covers employment.

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