Whole Foods and Wild Oats Shopper Survey
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Results and Analysis of Whole Foods and Wild Oats Shopper Survey conducted for Whole Foods Market and Wild Oats Markets by the polling company™, inc. I. METHODOLOGY II. KEY FINDINGS III. GENERAL GROCERY HABITS IV. WHOLE FOODS SHOPPERS V. WILD OATS SHOPPERS VI. CROSS-SHOPPING WITHIN EIGHT CATEGORIES A. Produce B. Natural and Organic Foods C. Organic Produce D. Dairy Products E. Fresh Meat and Fish F. Prepared Foods G. Breads, Rolls, and Other Bakery Items H. Frozen Foods VII. IN CONCLUSION APPENDIX A: ZIP CODES SURVEYED APPENDIX B: CALL DISPOSITION REPORT APPENDIX C: MASTER SURVEY INSTRUMENT APPENDIX D: TOPLINE DATA I. METHODOLOGY The following data and analysis are based on telephone surveys of 1,600 adults aged 18 and older who reside in eight metropolitan areas across the United States and who qualified as either a “Frequent” or a “Cusp” shopper at Whole Foods Market (Whole Foods) and/or Wild Oats Markets (Wild Oats) as defined below. The surveys were conducted by the polling company™, inc. June 22-28, 2007. The zip codes to be surveyed within each of the eight metropolitan areas were provided to the polling company™, inc. prior to commencement of fielding. A full list of the zip codes surveyed within each area is attached as Appendix A to this report. These metropolitan areas represent geographically and demographically diverse cities of varying population sizes. Specifically, they included four “overlap” areas (where both Whole Foods and Wild Oats were present): Portland, Maine; Medford and Saugus, Massachusetts; Hinsdale, Illinois; and, Los Angeles, Santa Monica, and Brentwood, California. In addition, two areas were selected in which Whole Foods was present but where Wild Oats was not present: Greater Washington, DC metro area, and West Bloomfield, Michigan. In the final two areas Wild Oats was present, but Whole Foods was not present: Memphis, Tennessee, and Salt Lake City, Utah. In each area, 100 interviews with Frequent shoppers and 100 interviews with Cusp shoppers were collected. These quotas were set to ensure that there was adequate coverage of both the companies’ current regular shoppers as well as those who less frequently patronize them. This survey was not meant to represent the actual ratio of Frequent to Cusp shoppers in any particular geographic area. To qualify as a “Frequent” shopper of Whole Foods or Wild Oats, respondents had to report shopping there “more than once a week,” “once a week,” “a few times a month,” or “once a month.” To qualify as a “Cusp” shopper of Whole Foods or Wild Oats, respondents had to report shopping there “a few times a year,” “once a year or less,” or “have shopped there once or twice.” the polling company™, inc. for Whole Foods and Wild Oats 2 Results and Analysis of Shopper Survey July 2007 In the overlap areas, to qualify as a “Frequent” shopper overall, respondents had to meet the “Frequent” criteria for Whole Foods or Wild Oats and could be a Frequent, Cusp or non-shopper of the other company. To qualify as a “Cusp” shopper overall, respondents had to meet the “Cusp” criteria for Whole Foods or Wild Oats and could be a Cusp or non-shopper of the other company. All surveys were conducted at a Computer-Assisted Telephone Interviewing facility, Central Marketing Inc., using live callers. Central Marketing Inc. is a subcontracted phone bank that the polling company™, inc. has had a professional relationship with for over 10 years. All interviewers underwent training prior to administering the survey and had to successfully complete a practice interview with a supervisor prior to “going live” and speaking with actual survey respondents. The purpose and sponsor of the survey were not made known to the interviewers. After an interview was completed, but before a respondent ended the call, a supervisor overrode the phone line and confirmed that (1) the interview had taken place (2) with a qualified individual (in this case, that he or she met the Whole Foods and/or Wild Oats shopping requirements). Ninety percent of all completed interviews were validated by a supervisor in this way. A Random Digit Dial (RDD) sample was drawn based on the zip codes in the eight areas provided to the polling company™, inc. This was done by pulling all the listed household phone numbers for a particular zip code and then deleting the original final two digits of the phone number and replacing them with a new set of randomly-selected digits. This ensures that all households with telephones within the designated zip codes, including those with unlisted numbers, have an equal chance to be called. Additionally, respondents were also asked for their zip codes to confirm their eligibility for the survey. Overall the incidence of the survey – that is, the percentage of potential respondents who were reached via telephone and were willing to take the survey who actually qualified and were administered the full questionnaire – was approximately 33%. Respondents were promised anonymity in accordance with the American Association for Public Opinion Research (AAPOR) and the Council of American Survey Research Organizations (CASRO) industry standards. Survey respondents were not offered any rewards or incentives for their completing the survey. A total of 427,397 phone calls were placed during this research endeavor: 1,607 of these resulted in completed interviews, 3,197 were terminated because they did not qualify to take the survey, 23,404 were refusals (i.e., potential respondents said that they did not wish to be surveyed), and the rest were a combination of no answers, disconnected or not-in-service numbers, businesses, answering machines, and the like. A complete disposition of calls, broken down by area, is attached as Appendix B to this report. the polling company™, inc. for Whole Foods and Wild Oats 3 Results and Analysis of Shopper Survey July 2007 The master survey instrument contained 55 questions. The exact number of questions each respondent was asked depended on his or her answers given throughout the survey. Respondents in the non-overlap areas, for example, were only asked about the company (Whole Foods or Wild Oats) present in their area. Those in the overlap areas who reported shopping only at one company were only asked follow-up questions about it. The master survey instrument and topline data are attached as Appendices C and D to this report. As indicated above, the target populations for this survey are Frequent and Cusp Whole Foods and Wild Oats shoppers in each of the eight metropolitan areas defined by the zip codes provided to the polling company. The survey yielded 16 randomly-selected groups of shoppers fitting those criteria. The survey responses are reported for various groupings of respondents, including all respondents, as indicative of shopping patterns and shopper characteristics in the selected areas. Margin of error calculations are meaningful only for the 16 randomly-selected groups, and for percentages respecting those groups in the range of 50% the margin of error is approximately +/-10%. For percentages respecting those groups above or below the range of 50%, the margin of error is lower than 10%. the polling company™, inc. for Whole Foods and Wild Oats 4 Results and Analysis of Shopper Survey July 2007 II. KEY FINDINGS Whole Foods and Wild Oats Shoppers Patronize a Number of Different Retailers for their Grocery Needs; For Most, Whole Foods and Wild Oats are Regarded as Secondary and Supplemental In each of the eight metropolitan areas surveyed, respondents who qualified as Whole Foods or Wild Oats shoppers were given the chance to name, in open-ended fashion without pre-given answer choices read by the interviewer, the stores from which they got their groceries. The lists volunteered by the approximately 200 respondents surveyed in each area were lengthy and contained between 21 and 49 total stores. Only in one area were Whole Foods or Wild Oats named by more than one-third of respondents. Furthermore, a 70%+ majority of shoppers of each company reported spending 20% or less of their total grocery budgets at either Whole Foods or Wild Oats and fewer than one-in-ten devoted a majority (51% or more) of their total grocery expenditure to these retailers. The logical reverse of that finding: most Whole Foods and Wild Oats shoppers do most of their grocery shopping elsewhere. In fact, even the most frequent and high-spending shoppers look to other stores for some, and in many cases most, of their grocery needs. Infrequent, Small Purchases Dominate Very few Whole Foods or Wild Oats shoppers surveyed visited the retailers on more than a monthly basis and in each case the single most common shopping frequency reported was “a few times a year.” In addition, the majority of even the most frequent shoppers in both overlap and non-overlap areas spent less than $50 in the typical visit to either company’s stores. Whole Foods and Wild Oats Customers Demonstrate High Cross- Shopping Tendencies, Even Within Specific Product Categories Within each of the eight product categories tested, namely produce, natural and organic foods, organic produce, dairy, fresh meat and fish, prepared foods, frozen foods, and bread and bakery items, cross-shopping was pervasive. The majority of shoppers surveyed, even those who dedicated large portions of their overall grocery budgets to Whole Foods or Wild Oats, bought each of the eight types of grocery items at more than one food retailer. This finding held true for shoppers in both overlap and non-overlap areas. Furthermore, the strong majority of both Whole Foods and Wild Oats shoppers revealed that Whole Foods and Wild Oats received less patronage than other more primary grocery stores. the polling company™, inc.