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Lost in the Supermarket

By Stett Holbrook

IT'S NOT just banks and investment houses that are taking a beating on Wall Street. While they aren't crumbling into dust like Lehman Bros. or AIG, supermarkets are suffering, too. One of the stores bleeding the most red ink is Whole Foods.

Once a Wall Street darling, the Austin-based store has seen its stock fall off a cliff from a high of more than $77 in January 2006 to just over $16 last week. The store specializes in organic produce, fancy cheeses and sustainably raised meats and fish. Many of its products are more expensive than those at competitors like Safeway and Trader Joe's. As a result the store has long endured "whole paycheck" jabs and a reputation as a luxury market.

To combat sliding sales and what it sees as a misperception that it's a Lexus-class grocery store, Whole Foods has taken steps to keep customers coming through the doors. The stores now post weekly specials to alert shoppers to bargains. The company has expanded its line of in-house "365" brand of products in an effort to offer more affordable grocery items. The store has also started leading "value tours" in hopes of proving the store isn't just for wealthy Camembert- and arugula-eating liberal elites. Once a month or so, a "value guru" escorts budget-minded shoppers around the store to show them where the deal is.

"A lot of this is a reflection of the economy," said Vanessa Cornish, Whole Foods media affairs representative. "We acknowledge there is a perception that we are an expensive grocery store."

And believe it or not, there are some deals. I went on a value tour with Cornish last week at Whole Foods' mammoth Cupertino store last week. While it takes some discipline to pass up the gelato bar and all those fancy prepared foods, shopping at Whole Foods doesn't have to consume your whole paycheck.

I compared a few items at Whole Foods to those at my local Safeway. Whole Foods had a gallon of organic milk for $6.29 while Safeway sold theirs for $6.89. Organic red bell peppers were selling for $2.99 while Safeway had conventional peppers for the same price. At Whole Foods 500 milliliters of extra virgin olive oil is on sale for $5.99. Safeway's brand of olive oil sells for $8.99. Artichokes are on sale at Whole Foods for two for $3. At Safeway, medium-size artichokes sell for $2.99 each.

While I admit this was a small survey, there were definitely bargains to be had. There's really no trick to finding deals at Whole Foods. Look for the sales. Buy in bulk. Clip coupons. Buy produce in season. Limit your purchase of prepared, packaged food. Of course your own eating habits will determine how much or how little you spend.

Some of Whole Foods food is more expensive—and it should be. Grass-fed beef, wild fish, air-cooled organic chicken and locally grown vegetables are premium products. You get what you pay for, whereas cheap meat and vegetables don't reflect the impact pesticides and other chemical inputs have on the environment and workers. But society pays for those things down the road.

Whole Foods sells food from all over the world, but the store deserves credit for seeking out local growers and producers. While I can't say whether local purveyors are all happy with the prices at Whole Foods, it's good to know that I can support local growers and not break the bank the process.

I confess I do most of my produce shopping at my local farmers market and pick up the rest of my groceries at Trader Joe's. But with two new stores planned in San Jose in 2010 and two in Santa Cruz County next year as well as existing locations in Los Gatos, Palo Alto, Campbell and Los Altos, I might give Whole Foods another try.

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