Trader Joe’s vs. Whole Foods Market

The grocery industry has a relatively high market commonality; a lot of grocery stores are somewhat related in terms of technologies used, labor force and the products or services offered in the stores. Differentiation with other competitors is key for survival in this highly competitive industry.

Trader Joe’s is a leading firm that is taking over the supermarket industry. The company completely altered the idea of a traditional supermarket and turned it into a whole new experience for consumers. Through Trader Joe’s strategic planning, they’ve paved a way for consumers to have high-quality products while paying low prices. Trader Joe’s provides fewer products that are health-conscious, unique and privately labeled. Trader Joe’s has utilized this, secrecy, employee job satisfaction, culture and starting trends to its advantage. Within its industry companies are divided into different strategic groups. Aldi, similar Trader Joe’s strategic planning, is apart of the cultured-discount neighborhood market. This firm continues the low-stock, less-waste, small store, and low price method. A Walmart express used a hybrid strategy that made it a cross between a grocery, pharmacy, and convenience store. Tesco is the third that falls with small neighborhood markets strategy and focused on organic products, similar to Trader Joe’s. As the company grows and expands, there is caution in change of Trader Joe’s processes. With growth, there comes new management and employees which can alter the way a specific store is ran and there is worry of change in the stores normal procedures. Change that doesn’t follow the process could ultimately result in a downfall, so this can be considered a key challenge to watch in the future. Increased bureaucracy is additionally a

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

For our case assignment, we decided to compare two grocery stores popular in the NYC area: Whole Foods and Trader Joe’s. We each visited a different location of each store; Samantha visited the Trader Joe’s in Union Square, Heather visited Trader Joe’s on the Upper West Side, Cathleen visited Whole Foods on the Upper West Side, and Brittany visited Whole Foods in Chelsea. Each store had its own dynamic, but the brand positioning for both stores was consistent.

As our short-term objectives evolve with Whole Foods Market and Trader Joe’s, it is important to identify and clearly state our objectives the long run.

The 'eat like your owner' trend is securely under way. We want our dogs to have high quality food and feel proud to serve them the best of what is available. Whether you are at Walmart, Target or Whole Foods you can find quality brands like Freshpet, Beneful, Milo's Kitchen, and Blue Buffalo. Perhaps, the pet food industry is right on target with the holistic approach many people are now adopting to both their lives and the lives of their pets. Without doubt, the whole foods these premium brands incorporate into their recipes are often fresh sourced and selected with a broad nutritional profile in mind to promote the highest health in our pets.

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.

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

This case provides an excellent illustration of how this relatively small retail chain can thrive in the face of a dominant market leader. In addition, the key is positioning away from the strengths of the competition, creating your own unique and distinct position. Successful in doing this Whole Foods has brilliantly identified a retail segment of shoppers who are not interested in the items that prevalent mass discount retailers deliver.

In 1980 Whole Foods Market opened its first store. Over the last thirty-five years, Whole Foods has transformed the organic and natural grocery industry. Whole Foods Market’s vision is “to become an international brand synonymous with carrying the highest-quality natural and organic foods available and being the best food retailer in every community in which a whole foods store was located” (Thompson, Peteraf, Gamble, & Strickland, 2015, pp.C11). By understanding Whole Foods’ strategies, insightful strategic elements, competition, and future recommendation, it would then be possible to build a better understand of the success of the organizations and the change it has brought to the industry.

From our Five forces of competition analysis, we could clearly see that Whole Foods market has high competition from several factors. The threat of new entrants is high as well it has high Rivalry from already established retailers like Walmart, Kroger’s etc. In this scenario, whole foods hadn’t made good revenue for the past two years. This also reduced the sharemarket value of Whole Foods. John Mackey, Founder of Whole Foods and his research partner Raj Sisodia, came up with a new term referring their business model as “conscious capitalism”, mentioning that their main intention is to serve all its stakeholders – customers, employees, investors, communities, suppliers and the environment. Due to rise in competition, whole foods couldn’t achieve

Whole Food’s competitive advantage was no longer good enough sustain profitability and to fend off the “newbies” who flooded the market with cheaper substitutes. Inevitably, the increase in supply of organic food eroded at Whole Food’s profits and customer base. Whole Foods struggled to keep their customers who migrated to competitors that offered lower prices. When Whole Food realized that their biggest issue was high product prices, they attempted to remedy the problem by attempting various cost-cutting approaches which includes laying-off employees and closing down low performing stores. Unfortunately, their effort to remain relevant and to compensate for their market-share loses didn’t avail much. What Whole Foods needed was a new strategy and new advantage that will once again set this grocery giant apart and bring back profitability. These two were somewhat realized in the sale to Amazon. First, the sale the largest online retailer was a way for Whole Foods to expand its customer base and to further its mission of supplying healthy products at a much cheaper

Whole Food Market is one of the most successful organic food grocery chains. Health consciousness among the Americans is increasing day by day, with that Whole Foods supplies organic foods which satisfies their demand and makes it a successful brand (WholeFoodsMarket, 2014). The fiscal year 2013 was the best year for the company as the sales of the company touched 13 billion dollars. Expansion in 10 new markets with 32 new stores shows how the company has been successful. (Wholefoodsmarket, 2013)

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.

One large thing that all companies in the grocery store industry must do is focus on meeting the needs of the new generation of buyers. The “millennials” are the future decision makers in households and they will have the disposable income and have the choice on where they want to spend their money. Baby boomers are starting to age and soon most baby boomers will be on a fixed income and will not have the choices that millennials will have. Millennials want convenience and are variety to choose from (2012). The progression of baby