Tip of the Month: The 2012 Retail Survey


It’s good to be big or small, but don’t mess with Mr. In-Between!

For the third year in a row, I’ve been honored to assist in analyzing the data from WholeFoods Magazine’s Retailer Survey, which starts on page 20, and this year is outstanding! We’ve had the largest response in 35 years of doing the survey, and the quality of stores is truly remarkable. With nearly one million square feet and $665 million in sales represented, the survey offers a comprehensive view of our dynamic industry, from the smallest supplements store to the largest fresh-foods supermarket.

While you can read the detail and analysis beginning on page 20, I want to highlight one aspect I hope will help you choose the right product mix and footprint for your store.

As before, we’ve organized the survey according product mix, with perishable foods—refrigerated, frozen, prepared and produce—being the primary distinguishing characteristic between stores. Whole Foods Market gets 70% of its sales from perishables. The typical supermarket gets 25–33%. Supplements stores, of course, are in the low single digits for perishables sales.

What we found in this year’s survey is stores that get a majority of sales from vitamins, with little or no perishables—on average 4%—do quite well. At the other end of the spectrum, stores with the full array of perishables—at least 29%—including fresh produce and kitchen, also drive significant sales and profits. It is the stores in between, those with 10–19% of sales from perishables, that don’t fare as well.

Typically, these stores do not have a kitchen, or only limited prepared foods. Also, these stores still get a large plurality of sales—45% on average—from supplements. The average footprint is 4,500 square feet, which appears to not be large enough to merchandise all the fresh-foods categories, including kitchen, but is fully 2,000 square feet larger than the average supplements store. Based on the survey, it takes at least 6,000 square feet to do a convincing job with all the perishables departments, including kitchen.

Three numbers in particular tell the story of the “in-between” store. First, profits are lower than either supplements stores or full-perishables stores, at 4.7% vs. 9.0% and 5.8%, respectively. In-betweeners also pay a premium for rent, at 7.3% of sales compared to a high of 5.45% for any of the other store-types. Finally, in-between stores appear to be understaffed, with just 2.7 full-time-equivalent employees per thousand square feet compared to 3.2 and 3.1 persons for smaller and larger stores, respectively.

Bottom line: if you’re thinking of going big, make it big enough to do it well. Otherwise, save yourself the money and the headache and keep your product mix simple, and your footprint compact.

I believe the WholeFoods Retailer Survey shines a bright light on critical variables you need to run your store efficiently, and hope you enjoy this year’s findings. Please give us your thoughts next year when we send out the survey questionnaire. The more the merrier! WF

Jay Jacobowitz is president and founder of Retail Insights®, a professional consulting service for natural products retailers established in 1998, and creator of Natural Insights for Well Being®, a comprehensive marketing service designed especially for independent natural products retailers. With 35 years of wholesale and retail industry experience, Jay has assisted in developing over 1,000 successful natural products retail stores in the U.S. and abroad. Jay is a popular author, educator, and speaker, and is the merchandising editor of WholeFoods Magazine, for which he writes Merchandising Insights and Tip of the Month. Jay also serves the Natural Products Association in several capacities. He can be reached at (800)328-0855 or via e-mail at jay@retailinsights.com. Jay will be speaking at NPA SOHO in Orlando, FL, on Thursday, Dec. 6 at 7:00 p.m., where he will be leading a roundtable discussion about current retailing trends and independent retailer concerns. On Friday, Dec. 7 from 2:45 to 3:45 p.m., Jay will be on a panel discussing the benefits of branding your own store. Jay will be exhibiting at SOHO at booth #210.

Published in WholeFoods Magazine, December 2012