"John Mackey, who cofounded Whole Foods in 1980, told podcast host David Senra in an episode released last week that Walmart's move into groceries in the late '80s helped the grocery chain find awider audience. In its early years, Whole Foods served a niche market of health-conscious shoppers. Its clientele was mostly "a bunch of hippies selling food to other hippies," Mackey said, describing one venture capitalist's summation of the store."
"In 1988, however, Walmart made a move that would send ripples through the US grocery industry: It opened its first Supercenter, which sold both the general merchandise that Walmart was known for at the time, as well as groceries, a category that put it in competition with traditional supermarkets for the first time. Walmart's focus on low prices sent many grocery chains scrambling to cut their own prices - and shed costs accordingly, Mackey told Senra during the episode."
Whole Foods was founded in 1980 serving health-conscious, niche shoppers. Walmart opened its first Supercenter in 1988 and entered groceries, creating intense low-price competition. Many grocery chains reacted by cutting store spending and labor, producing harsher store environments and weaker customer service. Whole Foods chose a contrasting strategy of focusing on higher-quality, health-focused product selection and elevated customer service, including employees assisting customers to their cars. That emphasis on quality and service attracted a broader customer base and supported Whole Foods' growth as competitors concentrated on cost-cutting to match Walmart.
Read at Business Insider
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