Half Foods?

I’ve always felt store design operates a little bit on the periphery of retail.

That’s not to say what you all do is peripheral! Quite the contrary. But not many others understand it, appreciate it or particularly value it.

When I first started writing about store design, I turned to an old business journalist’s tool for company or industry profiles: calling Wall Street analysts from the big firms to analyze Target, for example, or Best Buy. They followed these companies intensely, knew all the ins and outs, strengths and weaknesses.

But when I’d mention store design, there’d be a pause – a silence.

“What again?”

When I’d explain what I meant by store design – the importance of creating a strong, branded environment that delivers a clear message about what this retailer stands for – I’d often as not hear, “Hey, that’s an interesting angle, I never thought much about that.”

What are the analysts telling reporters these days about Whole Foods?

Nothing gets the business press’ attention like a big drop in stock prices, which usually follows a fall in same-store sales. And when it’s Whole Foods, and a 50 percent drop in share price since February, well, yeah, that’s attention-getting.

This is not a new issue for Whole Foods: Its prices are perceived as simply, unreasonably, outrageously too high, particularly for a country coming out of a bruising recession.

“Their single biggest problem is their price image,” one of those analysts, Meredith Adler of Barclays Capital, told The New York Times. “If it’s selling fish that’s $45 a pound, it will be hard to convince people that prices are good.”

Whole Foods is stubbornly holding the line on prices. As Co-CEO Walter Robb retorted, reducing prices is “a race to the bottom.”

But if the Whole Foods store we all know and love is telling one message – “this is Whole Foods, our signage is funky, our staff is knowledgeable, we were the first true believers, taste a grape and ignore those price tags” – the company is hoping a new Whole Foods store concept will tell a different message.

The new stores, to be called 365, will be smaller, their merchandise presumably more limited, and their prices lower. But store designers will have a narrow path to tread in creating an image for its baby (free-range) chick. Will it clearly be a Whole Foods offshoot? Or its own identity?

If tied to the mother ship, 365 will continue to carry the high-price anchor around its baby chick's  ankles. If cut loose, though, it will lose an important branding advantage.

Founder John Mackey has compared it to Nordstrom Rack. Except who wants salmon that first sat unsold on Whole Foods’ shelves?

So pay attention, analysts, to how these stores are built, put together and branded.

As a journalist, writer, editor and commentator, Steve Kaufman has been watching the store design industry for 20 years. He has seen the business cycle through retailtainment, minimalism, category killers, big boxes, pop-ups, custom stores, global roll-outs, international sourcing, interactive kiosks, the emergence of China, the various definitions of “branding” and Amazon.com. He has reported on the rise of brand concept shops, the demise of brand concept shops and the resurgence of brand concept shops. He has been an eyewitness to the reality that nothing stays the same, except the retailer-shopper relationship.