Whole Foods Market Earnings Call Insights: Price Investments and Relative Price Index
Priscilla Tsai – JPMorgan: Hi, this is Priscilla Tsai in for Ken today. So, on the recent price investments could you guys provide some color on which customers are they rezoning with the most? Meaning are they attracting maybe some of the smaller basket customers or new customers or are they working across different basket sizes?
A. C. Gallo – President and COO: I think that the – when we do price investments, we do in a different forms, sometimes it’s a one day sales, we just had a one day sale on organic chickens, sometimes we have a big one day sale coming up on blueberries next month. Sometimes it’s just promotions within the (indiscernible) to do on a weekly promotion. We have different targeted promotions to different kinds of customers. We think that what we’re trying to do is really try to give value to all customers. We’ll find that everybody likes the deal. So, sometimes it’s a really low price. We have that everyday low value price on our Three Wishes wines that we sell for $2.99. And a certain wine customer likes to buy that and then sometimes we just get a great deal on a bottle of wine that might suffer $20 and that customer feels like they are getting good deal too. So, I think our strategy is really one off trying to get value throughout all the different categories because everybody really likes – everybody in every different category likes the deal.
Relative Price Index
Shane Higgins – Deutsche Bank: I just wanted to ask real quick about how you guys are measuring your relative price perception today and just the overall position in your markets and how that has changed maybe over the last few months?
Ken Meyer – EVP, Operations: This is Ken. One of the key things that we are using is our price index and we look at both the overall market that we are in as well as our primarily competitors in terms of how we are indexing against them and we look at that on a monthly basis.
Shane Higgins – Deutsche Bank: And I guess that’s been improving or – and then just a quick follow-on to that. Have you seen any response from competitors as you guys imagined that has improved?
A. C. Gallo – President and COO: This is A.C. The marketplace is very competitive and it is very dynamic. We are constantly looking at what our competition is doing, doing some adjustments to what they do, doing some of the stuff we do ourselves. We see other people adjust to what we do at times, not only from price standpoint but also from a product standpoint. We tend to really always look at new trends of products and bring products in earlier than other people and we know that a lot of other competitors look at what we are doing, see what kind of products we are offering, what new trends there might be and then try to bring those products in as well. So, it is just very dynamic and I’d say that we are looking at what everyone is doing and they are looking at what we are doing and it is constantly adjusting and it is challenging environment and you are constantly adjusting to what each other is doing.
Shane Higgins – Deutsche Bank: But you didn’t say it’s changed or become significantly more competitive recently, has it?
Walter Robb – Co-CEO: That’s correct.
A Closer Look: Whole Foods Earnings Cheat Sheet>>