Whole Foods Industry Analysis

Value pricing began to strengthen Whole Food Market after 2008-2009 fiscal year when the company realized that they had been hit by the economic crisis harder than they had expected. Prices were reduced for key items, different size packages were introduced, signs and aisle

A weakness that Whole Foods have is their reputation. A reputation for a grocer is key to its survival and they have the reputation of being very expensive or some call it “whole paycheck.”

The Whole Foods (WF) annual report for 2010 states “Our growth strategy is to expand primarily through new store openings. We have a disciplined, opportunistic real estate strategy, opening stores in existing trade areas as well as new areas, including international locations. Our new stores typically are located on premium real estate sites and range in size between 35,000 and 50,000 square feet which we believe is appropriate in most circumstances to maximize return on invested capital and Economic Value Added (“EVA®”). Our growth strategy includes opening new stores in existing and new areas and operating those stores successfully.” (Flanagan, G. 2010). This means they are growing and spreading their wings out into a large variety of regions. The report also stated in order to meet those goals “many of our competitors went back and forth on their pricing strategies, we stayed true to our goal of offering a clear value choice in every department through compelling prices on known value items, as well as targeted pricing and promotional strategies” (Flanagan, G. 2010).

The existing rivals of Whole Foods Market are primarily Trader Joe’s, Kroger, Wegman’s, Walmart, and Safeway. However, Whole Foods Market has a specific niche and caters to a particular clientele attempting to increase customer loyalty, as it focuses on carrying natural and organic foods and is considered a premium brand upscale grocery store. The principal competitor of Whole Foods Market is Trader Joe’s, which has over 400 stores in North America and sells a substantial amount of organic food and products (they are not, however, exclusively organic and natural). Trader Joe’s stores are much smaller with less product selection

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 (ticker: WFM) one of the main leaders in supermarket/grocery industry. The company opened its first store in 1980 in Austin, Texas and it was among few supermarkets that were providing natural products. (1) Whole Foods Market was the first store to emphasis on organic food with a clear mission to be a provider of products with the highest quality. Whole Foods started expanding into different states across United States by mergers and acquisitions. Their first international expansion was into Canada in 2002, followed by and acquisition of seven Fresh & Wild stores in United Kingdom in 2004 which was the largest chain of organic grocery stores. (2) In order to lock their strong presence Whole Foods needed to make sure that their mission is heard and that they are faithful to their values. They are known for the highest quality products, before a product is available for purchase in stores it first goes through multiple steps of quality control and only when the requirements are met, the product makes it way to shelves. In order to satisfy organic standard, products need USDA approval, which prohibits the use of genetically modified organisms, pesticides, use of antibiotics or growth hormones in livestock. (3) Whole Foods is an environmentally sustainable, an example would be that they encourage their shoppers to either reuse shopping bags or they provide paper bags that are recyclable, they also donate good amount of money for environmental

Product Development. Though Whole Foods Market began as a company dedicated to solely providing natural foods free of preservatives and other harmful agents, this came at a cost. Shopping at Whole Foods on a continual basis quickly got very expensive for most. With this in mind, Whole Foods decided to launch their own more

Whole Foods Market has evolved into one of the largest retailers of natural and organic foods. This company 's rapid growth and market success has to do with being a mission-driven company. Whole Foods is highly selective about what they sell and are dedicated to their core values. Whole Food 's integrated strategy consists of growth, differentiation, merchandising, and customer service. This strategic plan was aimed at expanding its operations to offer high quality and nutritious foods to more and more customers. It was also aimed at promoting organically grown foods, food safety concerns, and sustainability of the entire ecosystem.

The reason that management needs to keep a close eye on these companies is because many of these chains have started to create special organic and health food sections in an attempt to tap into the organic market. The reason that this could cause serious issues for Whole Foods is because “the higher prices that we charge for many of our products has prompted some media critics to dub Whole Foods as “Whole Paycheck,” a term that resonated with price-sensitive grocery shoppers who had visited a Whole Foods store”. This could drive them to enter competitors’ stores that are viewed as “discounters” to get the better deal in their mind. Some consumers however are able to overlook the exaggerated pricing of Whole Foods due to being “enchanted with the company’s product offerings and shopping experience”. This has been shown as many new customers that enter Whole Foods are often “awed by their perishables as we devote more space to fresh fruits and vegetables, including an extensive selection of organics, than most of our competitors”.

This makes it easier on customers working full time and families to obtain healthy goods without having to waste their precious time. While Whole Foods has numerous ways of getting products to their customers, how do they obtain these superior quality products themselves? One main question consumers have about Whole Foods is how they get these products in a world where GMO crops are taking over? Well the short answer is that Whole Foods has a long list of trustworthy and reliable

In order to have certified U. S. Department of Agriculture (USDA) the product must be at least 95% or 100% organic, and at least 70% organic will not have USDA label. The industry also provides their customers with natural foods by not adding these chemical such as: pesticides, antibiotics, hormones, synthetic chemical, artificial fertilizes preservatives, dyes or additives, or genetic engineering. Another company’s key success factor is that they take great care of their employees by provided them with stock option, health insurance, dental & vision plan, and employees will have 50% discount. By taking care of employees, the employees will work harder, focus and employees feel comfortable and enjoyable at their work.

The fundamental elements of Whole Foods Market revolve around offering the finest organic and natural foods to the customers through the retail grocery stores. It strives to sell products of the highest quality, most flavorful, least processed, freshest, and naturally preserved food available. Whole Foods market ensures that the goods are not just labeled organic; instead, they are grown and treated without hormones, pesticides, artificial fertilizers, and other additives. In this case, the ability to deliver superior value to customers under sound environmentally Fair Trade Practices best depicts Whole Foods. It is in tandem with the food industry, although part of its success originates from the narrow market

Whole Foods' utilizes a differentiated strategy, focused on organic and natural foods. This distinguishes them from mainstream grocery competitors, and puts them into competition with other specialized grocery outlets (Urani, 2008). This differentiation, combined with more traditional grocery industry size and operations, gives the company an advantage over most of its competitors.

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