Whole Foods Market Executive Summary

Whole Foods Market’s first retail location was in Austin, Texas. Today there are 342 stores in the United States, Canada and the United Kingdom. The growth of this health conscious conglomerate happened over the years by strategic acquisitions of profitable independent stores throughout United States. Mackey’s idealism and respect is exhibited in his openness about the contributions of these retailers to the success of WFM, as the website provides an in depth summary of each acquisition and its contribution to promoting healthier food choices (Whole Foods Market History, 2014). After four years in Austin, Texas WFM branched out into the city of Houston when it purchased the Whole Foods Company, and shortly after, on the west coast, a new store was built in Palo Alto, California. Subsequently WFM began aggressive acquisitions over the next few years, which help to accelerate the growth rate of WFM in other geographical locations. In 2002 WFM opened in Canada and in 2004 through the acquisition of United Kingdom’s grocery chain Fresh & Wild, it opened seven stores. Holistic eating is a worldwide affair that WFM is taking advantage

Whole Foods is a retailer that specializes in organic foods and it has done an excellent job of determining its target market and how to position itself. Instead of going head to head with large food retailers such as Wal-Mart, Whole Foods has found a niche market that works perfectly for itself. This niche market is one that prides itself on being health conscious and environmentally responsible and Whole Foods has done a great job of positioning itself in the same way through its environmentally safe actions and its use of the local community to stock its stores. However, as Whole Foods grows and expands, a person has to wonder if the company will be able to maintain this same position or will have to make

Every retail location carries a variety of products that distinguishes it from other stores in the same chain. Not surprisingly, it is difficult to achieve economies of scale. Supply Chain Mackey describes his consumers as being “part of a cult”. Whole Foods believes that the company’s emphasis on perishables and locally-sourced produce differentiates their stores from run-of-the-mill supermarkets and attracts loyal and devoted customers. However, “fresh produce” is one of the most challenging product categories to operate due to limited product shelf life and high cost of spoilage. Whole Foods has tried to circumvent most of the problems inherent in supplying fresh produce to its stores by sourcing locally and having short and flexible supply chains. In the case of fruits and vegetables, Whole Foods has buying relationships with local farmers who supply the store with seasonal produce. Thus, if one farmer is unable to produce a sufficient amount of yellow corn or heirloom tomatoes, the shortfall can be made up by another farmer. Although challenging to perfect, these short supply chains are agile and difficult for other big retailers to duplicate.

On averaged their stores are roughly 38,000 square feet and their locations typically carried 21,000 SKUs. They make two-thirds of its revenue by selling bakery, perishable items, and prepared foods. (Ager & Roberto, 2014). Peoples tend to shop at Whole Food Market because of their high-quality natural and organic food. In today’s world peoples are more concern about health concise and effect of pesticide products, more people choose to have organic fruits and vegetables. Whole Foods get most of their produces from local people which are natural and organic, which will help them gain more customer than other company because of increasing demand of organic food (Whole Foods Market History, n.d). They also have a strong brand image and they were the first supermarket who commit to completely eliminating disposable plastic grocery bags to help protect the environment. They also sell many USDA-certified organic

Whole Foods Market, Inc. (WFM) lives through their motto of “Whole Food, Whole People, Whole Planet.” WFM opened their first store in Austin, Texas with 19 employees in 1980. Today, WFM has 311 stores in the US, Canada and the UK, and employs more than 72,700 employees. Whole Foods Market is one of the largest natural and organic food retailers in North America. WFM has grown to its size today mostly through mergers and acquisitions of such brands as Bread and Circus and Natures Heartland. In 2011 and 2012 Whole Foods Market was added to the Fortune 100 “Best Places to Work” list. Fortune Magazine (2012)

Whole Foods Market Website Review Whole Foods Market is a growing company aimed to provide consumers with the highest quality natural and organic items available. In order for the company to reach out to wider potential markets, Whole Foods Markets has embarked on the latest technology marketing strategy. By doing so the company has launched a website through which shoppers can access products information, customer support and other relates services. The menus are clearly set and marked for ease access by the customers.

Whole Foods Market, Inc. has long been admired as an innovative company with quality standards, a devotion to community and environmental responsiveness, a healthy growth model and highly-regarded employment practices. However, the company has faced recent difficulties as a result of the economic recession, increasing competition, and complications from acquisitions. To revitalize the company from historical lows in its toughest year in history, Whole Foods Market must reassess its costs, refocus its expansion strategies, and promote its brand to compete for the diminishing consumer spending dollar.

Each location is responsible for its own network and distribution. All products are sourced locally. WFM caters to the needs of its local market. WFM uses a team approach—each store is a team, each department within a store is a team, and each employee is a member of a team. Each location is responsible for their critical decision making, marketing activities and training of employees. WFM is certified organic and believes that it can cultivate customer loyalty by emphasizing the benefits of organic foods. Whole Foods Market is profit oriented—operating under the belief that everyone benefits from profits—team members profit from employment opportunities, customers profit by the in-store experience that profits provide, and shareholders enjoy large dividends derived from company revenue. Whole Foods feels that its customers know the value of its products; therefore the retailer is not focused on lowering prices to increase its competitive advantage. WFM relies on buzz marketing generated by its customers. (The Winning Ways of Whole Foods,

Whole Foods is a supermarket that has successfully become the leader in the organic food segment of the grocery industry. While traditional markets have low brand loyalty and recognition, Whole Foods has focused almost entirely on its brand image, causing their strategy to be one of differentiation over cost leadership. Whole Foods is known as being far more expensive than other chains, due to this brand recognition. In their press release for the Q4 2014 results, they describe their vision and sum up what helps them develop that brand recognition. “We hold the idea of “food” to a higher standard, banning more than 75 ingredients commonly found in other stores, and we believe our unparalleled quality standards

Whole Foods Market, Inc, is an Austin, Texas based foods grocery that has the finest natural and organic food available, including produce, seafood, grocery, meat and poultry, bakery, prepared foods and catering, beer, wine, cheese; in addition to whole body, floral, pet products, and household products. Whole Foods is among the most profitable health food retailers in the United States. The rapid growth and market success has much to do with having remained a uniquely mission-driven company, highly selective about what they sell, dedicated to their core values, stringent quality standards, and committed to sustainable agriculture.

Whole Foods Market, Inc. was founded and created by four business people in Austin, TX during 1980. The founders opened Whole Foods Market because they wanted a supermarket that offered natural foods. This company was able to be successful because at the time they opened there were less than half a dozen natural food supermarkets in the United Sates. In 1984, they build stores in Houston and Dallas, they then moved to New Orleans, and eventually to the West Coast. A major part of Whole Foods growth has come from the many mergers and acquisitions with companies that have occurred throughout the years. The mergers and acquisitions gave Whole Foods’ even revenues to move to the East Coast.

The grocery industry is highly fragmented, with a multitude of strong regional players (Safeway, Publix, Kroeger, Wegmans, etc.). The largest grocery retailer in the United States is Wal-Mart, with an estimated 33% share. Other major retailers are targeting this segment of the industry, focused on a relatively narrow selection of key commodity foods at relatively low prices (Forbes, 2011). Whole Foods competes in a segment occupied by differentiated grocery players including Trader Joe's, Fresh Market and a highly fragmented selection of local and regional upscale and health-conscious grocery stores. The big players in the industry usually carry ranges of organic and natural products as well, siphoning off some business from Whole Foods. As Whole Foods grows, it comes into competition with mainstream grocery retailers more frequently (McLaughlin & Martin, 2009).

Marketed as ‘America’s healthiest grocery store’ the company has successfully grown to 408 stores across the world with sales of $14 billion in 2014 (Whole Foods Market, 2015). The firm is positioned as an upmarket grocery due to the emphasis on natural, organic origins, and as a result are able to charge a premium for their products. Through efficiently running its operations and stores, Whole Foods are able to maintain healthy 4.02% profit margins (Financial Times, 2015) and operating margins well above the American grocery store industry average at 6.58% (Bloomberg, 2015). Looking at 2015’s quarter 1 figures it is clear to see that Whole Foods have had a hugely successful year with sales of $4.7 billion, up 10% from the same period last year. Furthermore, they opened 9 new stores and have signed a further 11 new leases.

Whole Foods Market has expanded by a mixture of opening its own new stores and acquiring already existing stores. Today WFM does not follow this strategy, instead their motivation is to open its own large stores. This is due to noticeable sales differences in larger stores as opposed to smaller stores. WFM locates these newer stores in upscale areas of urban metropolitan centers and high-traffic shopping locations. Not all WFMs are isolated structures; some are located in strip malls. WFM offers a larger selection of natural and organic foods than any other grocery store. WFMs marketing expenditure is extremely small. They spend a measly 0.5% of their revenues on advertising. Their chief marketing strategy relies on word-of-mouth. WFM strives to meet or exceed customer expectations. This is so customers receive competent, knowledgeable, and friendly service and become advocates of WFM. The employees here have a decentralized team approach for store operations. This is so some personnel, merchandising, and operating

Whole Foods Market began in 1970 as a local supermarket. Over the past 31 years, Whole Foods Market has grown from a single store in Austin, Texas, to becoming one of the worldwide leaders in providing consumers with natural and organic foods. They have grown to over 300 stores in both North America and the United Kingdom. (Whole Foods Market, Inc., 2011) This report examines the chief elements of the strategy that Whole Foods Market has put into place. Also, it uses past financial data to provide an assessment of the condition of the company going forward. Those assessments include recommendations of future actions, along with concerns I have about the way the company is currently operating and some difficulties that may be on the way.