In the first comprehensive look at Whole Foods’ entry into Detroit in 2013, award-winning reporter and best-selling author Tracie McMillan reveals that the company’s grand aspirations to make natural, sustainable, and organic food affordable to that city’s poor have met with little success.
McMillan’s story, “Can Whole Foods Change the Way Poor People Eat?,” is online today with our media partner Slate and includes a price list that McMillan compiled, comparing the costs of 50 common items at the Detroit Whole Foods and three other area stores. Contradicting recent reports suggesting that Whole Foods is “cheap,” McMillan’s exhaustive research showed that the Detroit Whole Foods is nearly 30 percent more expensive than a popular local grocer.
“We’re coming to confront the disconnect between the accessibility and the affordability in healthy food,” said Walter Robb, Whole Foods co-CEO, in an early 2012 address to Detroit business leaders. Prices on some items would be lower, to make the store accessible to “all of Detroit.” That same year, Robb said that at the Detroit store “we’re going after elitism. We’re going after racism.” Real success, Robb told McMillan later, would include seeing that “health outcomes are being improved” in Detroit.
Yet for Whole Foods to succeed, it “needed to do more than just turn a profit,” McMillan writes. “It needed to persuade a new kind of customer that what it sold—local, organic, and sustainable—was worth seeking out. It needed, in other words, to change the food culture among the poor (or at least poorer), just as it has done among the affluent.”
In the nearly 18 months since opening, the store has succeeded financially, McMillan reports. Sales are double the initial projections and the store has created 180 new jobs that pay more than state and federal minimums and has become a sign of gentrification in the area.
But, McMillan writes, “If you consider Robb’s broader initial goals—to reach families just trying to eat healthier, to make truly healthy food truly accessible to a broad swath of the city, to tackle the class divide in health—Whole Foods hasn’t gotten very far.” McMillan estimates that only 5 to 12 percent of the Detroit Whole Foods’ sales are from customers on food stamps, while 38 percent of Detroit residents make use of the Supplemental Nutrition Assistance Program (SNAP) and 75 to 80 percent of other local grocers’ sales come from SNAP. Whole Foods would only say that the use of SNAP at the Detroit location was five-to-six times the chain’s averages, but would not confirm McMillan’s estimates.
“Shoppers wanting simple, affordable healthy food, rather than an aspirational product, have better options elsewhere,” McMillan concludes. “And for indisputably poor people…the prices simply aren’t low enough to work.”
As in her bestselling book, The American Way of Eating, McMillan questions whether for-profit companies are the best vehicles to address access to healthy food. “For anyone looking to address health and diet disparities, the lesson from Whole Foods in Detroit may well be that the problem is not food, but poverty. And that is a problem that requires more than a supermarket to solve.”
McMillan had unusual access to Whole Foods co-CEOs Walter Robb and John Mackey. Over the course of more than a year, she followed two lifelong Detroiters who visited Whole Foods as they tried to improve their diet, spoke extensively with Whole Foods leadership, and interviewed experts on food access, poverty and Detroit’s economic situation. She found that despite reduced prices and aggressive outreach on the part of Whole Foods, her subjects still considered the store prohibitively expensive. “That’s the bourgie store,” one would-be customer, Toyoda Ruff, told McMillan. “I just wonder how many people come from the ‘hood and go shopping at Whole Foods’ store. I bet you it’s not a lot.”
McMillan’s price study compared costs at the Detroit Whole Foods, a local Detroit supermarket, a suburban Whole Foods, and a suburban Walmart. She examined not only the cost of organic foods, but also checked prices of brand-name products and looked for the cheapest version of each product, to approximate the experience of a budget-conscious shopper.
McMillan’s findings show that Whole Foods’ organic products were cheaper or close in price to those of the other stores, and its prices for packaged items such as pasta sauce were “competitive.” But a basket of fresh items such as produce, meat, and dairy was 58 percent more expensive at Whole Foods than at a neighborhood grocer named King Cole. For the entire list of 50 items, switching to King Cole from the Detroit Whole Foods would cost 21 percent less.
McMillan reports that Whole Foods’ refused to engage in a direct conversation about price. In discussions between Robb and McMillan, he agreed that past criticism of the store for high prices had been deserved and spoke of the desire to increase access to healthier food. “But whenever I observed that it costs more to shop for all of one’s groceries there, he repeated the mantra that Whole Foods was competitive on like-to-like items, and changed the subject to quality,” writes McMillan.
“The cheapest food is not always the best deal for you, from the health perspective,” Robb tells McMillan. “Yes, you can buy cheaper food than what we offer at Whole Foods, but there’s often a trade off. I don’t know how to tell you the difference between pink slime and beef that’s been raised to our standards. It’s not the same product, but is it worth it to you?”
“Ultimately customers get to choose,” Robb tells McMillan. “It’s a free market, and we’re going to present our choices, and then people are going to decide if they’re worth it or not. You know, we’re not miracle workers. We’re just a grocer.”
Slate’s interactive “shopping cart” illustrates the comparative prices. Slate is also making available McMillan’s raw data. In addition, the Food & Environment Reporting Network (FERN) is publishing McMillan’s detailed analyses.
In collaboration with FERN and The American Prospect, McMillan also wrote “As Common As Dirt,” which exposed systematic wage theft of farmworkers and won a 2013 James Beard Award in the Politics/Policy/Environment category.
You can read the full report on Slate and on here on our website.