Why are consumers willing to pay a premium amount for whole foods?

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We can illustrate the difference between the distinct concepts of business strategy and business model with groceries. Whole Foods clearly follows a different strategy than traditional grocery chains like Stop & Shop. Whole Foods focuses on organic and natural foods, appealing to health and socially conscious consumers through its strict food standards, its strong emphasis on sustainability, its requirement that meat suppliers conform to stringent animal welfare standards, and its emphasis on "fair trade" and local farm sourcing. In addition, Whole Foods offer a broad selection of non-GMO, vegan, gluten-free, dairy-free, and other speciality foods. The company also tries to offer superior service through a human resource model that emphasizes teamwork and gainsharing. Whole Foods, though, also appeals to consumers with enough disposable income to afford its higher prices. It is a classic upscale provider - offering a differentiated product (and service) that customers are willing to pay a premium for. Traditional supermarkets like Stop & Shop position themselves differently in the market. While they recently have started to offer organic and natural foods, the bulk of their offerings are mass-market grocery products and brands. They do not utilize sourcing policies as restrictive as Whole Food's. Traditional supermarkets appeal to more budget-conscious consumers who place less value on organic, natural, and sustainable foods.