• by Sarah Mahoney , September 14, 2011

While it probably won't be enough to shed its "Whole Paycheck" reputation, Whole Foods Market is going on a price offensive. First, its offer of $20 worth of groceries for $10 has become the fastest-selling coupon on LivingSocial. And second, it's publicizing consumer research that claims it is actually cheaper than other supermarkets.

The LivingSocial program, the first national grocery coupon ever offered by the deal site, didn't just sell well -- it sold fast. At its peak, people were buying about 80 coupons per second, Brendan P. Lewis, a spokesperson for the Washington D.C.-based LivingSocial, tells Marketing Daily. (While that is its fastest-selling coupon, it's not the best-selling -- a distinction that still goes to Amazon, which sold 1.3 million coupons back in January, he says.) And Whole Foods is also donating a portion of the proceeds toward its Whole Kids Foundation and antiobesity programs, another first for a national LivingSocial promotion.

Separately, Whole Foods -- based in Austin, Tex. -- says that it isn't just competitive with other national food chains, but that it's actually cheaper: It released a competitive pricing study showing that a basket of popular grocery items costs $5.38 less at Whole Foods Market than at other supermarkets. (The sample basket included non-sale prices for eggs, romaine lettuce, soy milk, yogurt, peanut butter, pasta sauce, and frozen fruit.)

While supermarket analyst David J. Livingston doesn't buy the chain's affordability claims ("They've got a huge mark-up," he says), "Whole Foods is very good at getting people to separate from their money once they are in the store. They do that through the 'Wow' factor, and presentation. Little details, like using window seating for their dining areas so potential shoppers can drive buy and see people eating there, all add to the psychological appeal. It's a store that's fun and makes people feel good."

The retailer's research also found that increasing food prices has not diminished consumer appetites for healthier foods, with 74% saying they will not compromise on the quality of food they buy. And 72% say they plan to keep buying the same amount of natural and/or organic foods they always have, with 24% saying natural and/or organic foods would make up more than a quarter of their total household food purchases this year.

But they are making changes to accommodate rapidly rising food prices: 75% have changed cooking and eating habits due to the economy, with 57% eating out less often. (The poll is based on responses of some 2,100 adults, and was done by Harris Interactive.)