According to Placer.ai - a California-based company using cell phone data to track pedestrian foot traffic in and around retail properties –traffic at Whole Foods, and many rivals, recovered strongly in Q2 2021 (April, May, June) compared with the same three months in 2020, when many consumers avoided brick & mortar stores altogether, made fewer, bigger trips, or simply worked through products they had bought during the pantry-loading phase in early March.
However, if you compare traffic over the same three-month period to two years previously (ie. before the pandemic), Whole Foods’ traffic remains stubbornly down, by around -20% in April 2021 (vs April 2019), around -16% in May 2021 vs May 2019, and around -13% in June 2021 vs June 2019, while fellow grocers experienced traffic growth, Ethan Chernofsky, VP marketing at Placer.ai, told FoodNavigator-USA.
“A year-over-two-year comparison emphasizes the unique strength of certain traditional grocers. Several, like Publix and Albertsons, marked growth compared to the equivalent months two years prior, throughout much of late 2020 and early 2021.
"This deepens the concept that the surge experienced by traditional grocers could spur a larger trend of ongoing success. Should these brands find tactics to extend the short-term success, the effects could be significant.
"H-E-B is a very interesting example in that COVID decreased visits, but the recovery has seen the brand catapult back into a position of strength. Visits for the weeks beginning June 14 and 21 were up 12.5% and 9.2% respectively when compared to their 2019 equivalent.”
'Whole Foods was among the worst positioned players in the sector'
Chernofsky added: “While COVID drove a lot of value for traditional grocers, it was uniquely challenging for a brand like Whole Foods. From the brand's orientation towards major cities to the heightened importance of value and the emphasis on 'one-stop-shop' grocers, Whole Foods was among the worst positioned players in the sector."
That said, "there are two critical elements to keep in mind," he noted. "First, Whole Foods is recovering with weekly data in June showing the strongest results since the onset of the pandemic with visits down just -9.3% and -11% the weeks beginning June 14 and 21 compared to the equivalent weeks in 2019.
“Second, Whole Foods is not a traditional grocer and the same elements that caused weakness during the pandemic are key differentiators in a normal period. As the recovery continues, Whole Foods should see a sustained rebound.”
He added: "There is a wider conversation to be had around Whole Foods and whether the brand is being properly utilized or if it's lost some of its focus. However, for the time being, it is clearly recovering at a strong pace, though lagging behind other brands."
So what's next for Whole Foods, which recently unveiled plans to merge its global and regional merchandising teams and have dedicated operations teams in the regions focus on merchandising execution and in-store operations?
“Some key weaknesses were certainly exposed [during the pandemic] and it's possible the brand looks to either double down on its unique selling points or move towards broader appeal with some significant shifts, as we return to more ‘normal’ shopping patterns,” said Chernofsky.
“The indication is that, like Trader Joe's and Wegmans, while COVID may have limited visits in the short term, the brand is so strong that as soon as visitors are able to return en masse - they do.”
'There's a reason Whole Foods turned on cable ads again recently...'
However, one industry source told us that he was not confident that visitors would return en masse in the immediate future, given that many people are still working from home.
“Whole Foods is losing trips/revenue due to fewer commuter breakfasts and midday lunches at prepared foods. Look, there's a reason Whole Foods turned on cable ads again recently…”
Whole Foods: ‘We are seeing customers come back in store to shop’
A Whole Foods spokeswoman told FoodNavigator-USA that while the Placer.ai data might look negative, it partly reflected the fact that basket size is up at Whole Foods, with customers shopping less frequently but buying more, a pandemic-fueled behavior that she claimed has lingered at Whole Foods.
But she added: “As we return to normal, we are seeing customers come back in store to shop. By March 2021, customer shopping in our stores was in line with pre-pandemic levels. Customer shopping at Whole Foods Market is defined as at least one unique visit from the customer to our stores in the last month. Ultimately, our data and the Placer.ai data are looking at different metrics - foot traffic vs active customers shopping - and that is why you are seeing a difference.
"To shed further light on the subject, as we are looking at customer visits we are noticing trips remain consolidated and basket size is still up whereas pre-pandemic customers came in more frequently and their basket size would therefore be smaller on average."
Salad/prepared food bars re-opening
Meanwhile, she added, “Approximately half of our 525+ stores have reopened some variation of their prepared foods offerings [which have historically been a key traffic driver for Whole Foods].
“Many locations have reopened previously closed self-serve offerings, and indoor and outdoor café seating areas in compliance with local regulations. Where allowed, these areas have reopened with a combination of enhanced cleaning and sanitation measures, social distancing protocols and, in some cases, conversion from self-serve to a team member-assisted service model.”
Meanwhile, all stores will resume food sampling and food demos “where there are no mandates or restrictions in place,” said the firm, which was acquired by Amazon in 2017.
Amazon doesn't report Whole Foods' sales separately, but said sales at its 'physical stores' - the vast majority of which are Whole Foods locations - declined 16% in Q1, 2021 vs Q1, 2020.
Placer.ai: Food shopper behavior overall is starting to return to pre-COVID patterns
In general, says Placer.ai, while the pandemic accelerated the adoption of food e-commerce, consumer behavior patterns and preferences in brick & mortar grocery stores are shifting back to pre-COVID patterns when it comes to visit frequency, duration, and timing.
During the pandemic, for example, there was a “strong shift towards weekday over weekend visits and growth in morning visits at the expense of late afternoon and evening visits," noted Placer.ai.
"However, location data from Q1 of 2021 showed a return to similar hourly and daily visits to those in Q1 of 2020.”
Likewise, while shoppers made fewer, bigger, longer, trips, during the early months of the pandemic to reduce their exposure to COVID-19, “By Q1 2021, median visit duration returned almost to its pre-pandemic number."