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I think they have higher costs too. In the UK their sites are in High Street locations unlike most other grocery stores. They also have a lot more front of ho
by Steve44 9y ago
I think they have higher costs too. In the UK their sites are in High Street locations unlike most other grocery stores. They also have a lot more front of house staff and have very high quality standards for their products and displays. That all costs and eats away at the raw cost-of-goods margin.
- naravara 9y agoAnd it's not just an idiosyncrasy to maintain that stuff either. If they don't maintain the perception of being a premium brand/neighborhood anchor people will stop shopping there. Whole Foods gets higher margins because their customer base cares more about various intangibles beyond just the value-for-money. Take those intangibles away and suddenly you're competing on value-for-money alone and Walmart will eat your lunch while smaller, independent grocers go after your dinner.
- Steve44 9y ago> cares more about various intangibles beyond just the value-for-money Very much, like many premium businesses part of what they are is to ensure everything will be lovely, easy, and just happen. That is the added value. Take that away and you're competing against ASDA etc. Premium brands need to keep that, it is a very valid market but must be looked after.