Whole Foods Versus Walmart

Every dollar you spend is a vote for what you want your world to be, and who you want to control.

Two of the largest grocery chains in America, Walmart and Whole Foods, are vastly different from one another but are having profound influences on each other.

PhotoCredit: NationOfChange.org

Photo credit: NationOfChange.org

From first glance, when walking into a Walmart Supercentre, the parking lot is massive and filled with literally hundreds of cars. Once inside, Walmart is always kept cool, well lit, and busy. Two things catch my eye first: the long line of over twenty-five cash registers for checkout, and the large produce section. Walmart strategically uses black bins to give the fresh produce more pop while keeping everything strategically organized. The sheer amount of food that Walmart offers is incredible, with endless rows of everything anyone can imagine. The typical Walmart discount store is 107,000 square feet and offers over 142,000 items. Everyone at Walmart appears to be entranced in searching and gathering their necessary groceries, while expressing few emotions, and then proceeding to the checkout. Walmart runs a very efficient system, except for how long the checkout lines can occasionally be, and has a very smart store setup.

Walking into Whole Foods can sometimes feel like entering a millennial hipster grocery store that has a non-traditional, craft feel to it. It is every vegan, vegetarian, environmentalist’s heaven. Almost everything in the store is organic or locally sourced. There is every type of meat substitute product you could imagine, with multiple brands to choose from. The shopping assistants are very helpful and are very knowledge in their specific subject area. Caroline Goggins (‘16), says “I recently bought vitamins there (of which they have an extensive section), and the lady helping me gave me all sorts of opinions and reviews, which ones were plant-based, why the Whole Foods brand was better and cheaper, etc. I left feeling very confident about my purchase and about the Whole Foods customer service! Another cool section is where you can package your granola/nut/grains. All things have at least one or more labels, ranging from certified organic, non-GMO, fair-trade, or local. You can fill bags with as much or as little of these high-end products as you would like! The dark chocolate covered almonds are to die for.”

Walmart Produce Section PhotoCredit: latimes.com

Walmart produce section.
Photo credit: latimes.com.

In the meat section, everything they sell has an animal welfare rating, ranging from 5+ to 1, to provide an easy way for the consumer to know how the animal was treated. A five means that the animal, like a chicken, is raised with proper space and not trapped in a small cage, is forced to molt, and its beak is not seared off.

Lastly, at the hot bar and prepared food section, everything is packed full of flavors. They have a salad bar with lots of organic and fresh toppings and pre-made cold salads, along with a hot bar with all kind of interesting vegetarian/vegan options to try. All prepared food has a comprehensive list of ingredients right under the description. Lastly, one takeaway that someone might miss is the detail Whole Foods puts into everything they do, from being knowledgeable in their particular field to the food they prepare, and the customer feels that when entering Whole Foods.

Obviously, there are differences between Walmart and Whole Foods when examining the two at face value, and particularly in cost and convenience. These two factors might be the main priorities for many consumers. However, as consumers, those two factors should not be the only ones driving our purchasing habits. We should also be influenced by what it takes for the food to arrive on Walmart’s or Whole Food’s shelves. Three other critical factors and questions to ask when making the decision where to spend your money are: Is it healthy? In what manner is the business run? And what impact will this purchase have on society in the long run?

Some studies suggest that people who shop at the higher-end grocery stores that specialize in organic food are happier and healthier.  New BIGinsight™ analysis reveals that Trader Joe’s and Whole Foods shoppers are happier with their health.

BIGinsight™ analysis

Image credit: BIGinsight™ analysis.

Whole Foods maintains a list of “Unacceptable Ingredients,” meaning that if a product contains one of these ingredients, they will not put it on their shelves. This list includes everything from MSG to high fructose corn syrup, plus artificial colors, artificial preservatives, and hydrogenated fats. The whole list is available to view and is updated periodically here. Approximately 54% of the products sold in stores like Walmart would be banned from Whole Foods due to containing these ingredients. GMOS, genetically modified organisms, such as corn Bt10, are on the list. Bt10 was found to contain a marker gene (used to determine its nucleic acid sequence) for resistance to ampicillin, a widely-used antibiotic. Production of this corn can lead to a higher risk of bacteria becoming resistant to that particular antibiotic. While Whole Foods has yet to pull all GMO ingredients from their stores, they also partner with Non-GMO Verified Project to offer numerous products that do not contain genetically modified ingredients, and they plan to eliminate products which contain them by 2018. GMOs are pervasive in the food supply, so it is very difficult to eliminate them, since they currently aren’t required to be labeled as “GMO” by law.

“Customers want transparency,” Walter Robb co-CEO of Whole Foods says, and the company tries not to keep the consumer in the dark as to where their food comes from, and how it is produced. Walmart is in the process of, “improving the transparency of the food chain,” it reports in its 2015 Global Responsibility Report. A rising concern for those who trust that “organic certified” means that the product meets those standards are worried about the large demand Walmart will begin to put on organic farmers, in order to meet Walmart’s needs. As an example, Walmart announced that it will begin to stock Wild Oats organic food products starting in April. Walmart’s EVP of Grocery explicitly stated they want to “disrupt the market” for organic products.  Wild Oats products will be priced at least 25 percent below some of the current organic brands that they carry and be priced on par with other non-organic brands. Wild Oats will offer roughly 100 items exclusively at approximately 2,000 Walmart stores and plans to expand the product line to 4,000 stores and continue to expand the breadth of the line. Walmart’s business decisions can affect the national food marketplace. Due to customer demand, in 2006 Walmart started carrying milk from cows without growth hormones. They changed their business based on consumer feedback and growing demand for healthier options. Organic milk sales increased by 25 percent from the year before.

Whole Foods Vegetable section PhotoCredit: BerkelySide.com

Whole Foods vegetable section
Photo credit: BerkelySide.com.

Walmart has been known for cutting corners and treating employees poorly to keep prices low, and it only gets worse as you move from the shelf to the factory to the field. The average Walmart employee earned just over $13,000 annually, and requires $730 in taxpayer-funded healthcare and $1,222 in other forms of assistance, such as food stamps and subsidized housing, to get by. The federal poverty guideline for a family of four is $17,650. The 2005 documentary film The High Cost of Low Prices exposes the practices of Walmart. Some of the allegations from the film include how Walmart keeps employees part-time as much as possible, understaffs stores, then asks employees to consistently stay late. People who work full time do not receive enough salary to raise their families. A typical employee who works there for three years receives, on average, $1.07 in wage increases. There is no overtime, but employees are often asked to stay late. According to the film, Walmart often uses undocumented workers to clean its stores at below minimum wages and violates child labor laws. 31 States have filed lawsuits against Walmart for unfair employee practices. Texas has sued for $150 million in unpaid wages. Over seventy percent of Walmart’s products come from China, which forces their workers to often work longer than twelve hours a day for under three dollars.

However, there is a positive perspective. Thousands of factories in China have decided that the deal is worth the price. The International Labor Rights Forum states that, “Wal-Mart provides access to vastly more store shelves than they could ever reach by themselves, a way to build a brand from Fort Worth to Frankfurt. As capital scours the globe for cheaper and more malleable workers, and as poor countries seek multinational companies to provide jobs, lift production and open export markets, Wal-Mart and China have forged themselves into the ultimate joint venture, their symbiosis influencing the terms of labor and consumption the world over.” More than 80 percent of the 6,000 factories in Wal-Mart’s worldwide database of suppliers are in China. Wal-Mart estimates it spent $15 billion on Chinese-made products last year, accounting for nearly one-eighth of all Chinese exports to the United States. The relationship that the two countries foster allows for them both to rise as economic superpowers. Walmart’s business design, which allows for lower prices while maintaining profits, does allow it to open in places other high-end grocery stores cannot. Walmart also serves many “food deserts,” somewhere where people do not have access to proper nutritional food, such as in large cities and many rural areas, ironically including farm areas. The largest two food deserts in Virginia are Petersburg and Lynchburg.

John Mackey, the current co-CEO of Whole Foods, believes that a responsible business benefits not only its shareholders, but all its stakeholders, a term that includes customers, employees, suppliers, the local community, and the environment. Whole Foods donates five percent of profits to nonprofit organizations. In sharp contrast to the usual corporate model, 94 percent of the company’s stock options go to non-executives. No employee may be paid more than 14 times what the average employee gets, which is about $29,000, a good wage for the grocery industry. Walmart CEO Lee Scott’s salary, plus bonuses, came to $17.4 million in 2006, receiving  $29.7 million in total compensation compared to Mackey’s $400,000. At Whole Foods, there are teams of employees, such as the prepared food team or the customer service team. That group votes on whether or not to accept a new employee after a trial period. They have an incentive to accept only skilled workers, because when the team performs well, everyone gets a bonus. Whole Foods has been listed by Fortune magazine among the best 100 companies to work for; in 2005 it ranked number 30.

Whole Foods did eliminate 1,500 jobs last year, however, roughly 1.6 percent of its American workforce, “as part of its ongoing commitment to lower prices for its customers” Mackey said. This abrupt change is most likely in response to Whole Foods’ stock that lost 40 percent of its value since February 2015, thanks to lower-than-expected earnings, an overcharging scandal in its New York City stores, and growing competition.

Choosing to buy your groceries and goods at higher end grocery stores that specialize in organic foods, like Whole Foods, has a domino effect with the change that we see in our society and especially in the economy. As consumers demand more local and organically grown food, grocery chains and markets have to supply the demand to remain competitive. Sales of organic foods in the U.S. jumped 11.3 percent, to $39.1 billion, last year, according to the Organic Trade Association. The problem for Whole Foods is that an increasing share of those sales is going to mainstream players in the U.S. grocery store business, such as Walmart, Kroger, Wegmans, and Publix, which logged $1.07 trillion in sales last year, according to Euromonitor International. By spending money at Whole Foods, consumers are displaying the demand for organic crops and humanely treated meats. Today, the government subsidizes corn and soy more than anything, and if you pick up any box off the shelf and look at the label of ingredients, you will find the word “soy” or one of the many others that describe the refined products of corn, such as: high fructose corn syrup, isolated fructose, etc.

In terms of cost, first and foremost, Whole Foods is more expensive across the board compared to Walmart, but for all the right reasons. Looking at the graph below from Outside magazine shows the differences in prices. Often referred to as “Whole Paycheck,” and with good reason, Whole Foods and the products they offer can only be reduced in price with the help of subsidies that would have to be approved by Congress.

Credit: Showdown Magazine

Image credit: Outside Magazine.

In the United States, there has been a dangerous trend over the past few decades: “If you look what has happened to the relative price of fresh fruits and vegetables, it has gone up by 40% since 1980, when the obesity epidemic first began. In contrast, the relative price of processed food has gone down by about 40%,” said Marion Nestle. The 2013 documentary, produced by Participant Media, A Place at the Table, is an examination of the issue of hunger in America focuses on the plight of three individuals from different parts of the country who struggle to find adequate nutrition. They show that with $3, it is possible to purchase only 312 calories of healthy food, versus 3,767 calories of unhealthy processed foods. By purchasing these processed foods that contain large amounts of soy and corn products, the farmers have to meet that demand, only possible with the aid of government subsidies, in order to keep prices low. Mark Smallwood, executive director of The Rodale Institute, a nonprofit that supports research in organic farming in Kutztown, Penn., says “The issue is that there aren’t the subsidies available to organic farmers that there are [for conventional farmers].” When looking at the pie chart, it is not a matter of using more of taxpayers dollars to provide more subsidies for vegetables, but instead to change the proportions in the pie chart.

A Place at the Table: Pie Chart of Subsidies

A Place at the Table: Pie Chart of Subsidies. Image credit: Megan Buchheit. 

In the end this comes back to the taxpayers, due to the expensive subsidies totaling up to $20 billion a year. Most of it goes to farmers producing staple commodities such as corn and soybeans. How we subsidize farms isn’t necessarily about the overall dollar amount; it comes to 5 percent to 10 percent of the market price of most of the subsidized crops. It’s that it takes some of the risk out of farming grains and oil seeds, but not fruits and vegetables.

The Washington Post, in an article on the 2014 Farm Bill, explained how farming is inherently risky. “Weather, insects and disease, over which you have limited control or none at all, can wipe you out. One of the ways farmers manage risk is to plant variety. Okay, powdery mildew got your strawberries, but the broccoli’s going gangbusters. For farmers, crops that are given guaranteed protection from both losses and price drops are lower-risk propositions.” Therefore, by growing the grains, farmers avoid trouble. Whether or not you are shopping at Walmart or Whole Foods, consumers can make change by starting to purchase healthier. When there is an overproduction of corn, and a shortage of kale and broccoli, the government will have to respond. In general, Whole Foods offers more of the local and organic options, but now Walmart has implemented the USDA’s new Know Your Farmer, Know Your Food campaign that is showing promise in connecting local farmers to large retailers.

In an ideal world, people would buy their food directly from the people who grew or caught it, or grow and catch it themselves. But most people can’t do that. American consumers need to become more informed on how and why they choose where and what they spend their dollar on. It may cost you a little more now, but your life is worth it, and in the long run the investment is worth it. Next time you enter the grocery store to make your round of purchases, stop and think: Is it healthy,? Do I want to support how this business operates? And how will this purchase affect society in the future?

Editors’ Note: The opinions published by The Match are solely those of the authors, and not of the entire publication or its staff as a whole. The Match welcomes thoughtful commentary and response to our content. You can respond in the comments below, but please do so respectfully. Letters to the Editors will be published, but they are subject to revision based on content and length. Letters can be sent to match@collegiate-va.org.

About the author

Senior at Collegiate school. Has a twin brother. Likes soccer and protein.