Online Shopping Case Study

Trader Joe’s is in the broad market of grocery retailers, a market where the top 10 revenue-generating companies accounted for over $360 billion in sales in 2011. This market is saturated with supermarkets (Publix and Kroger), large discount retailers (Wal-Mart and Target), premium retailers (Whole Foods and Fresh Market), warehouse clubs (Costco and Sam’s Club), and “hard discount” retailers (Dollar General). With this large variation in grocer strategies, the market is heavily penetrated and competition is fierce. Supermarkets are continually losing market share in grocery sales (51 percent in 2011 as opposed to 66 percent in 2001) as players like Wal-Mart and Costco continue to generate more revenue. Although the supermarket share is decreasing, the overall grocery market is steadily increasing as the population of the United States increases. People always need to eat, so there will always be a

Stiff competition within the industry would be one of the key threats that Whole Foods will face. Strong competitors, coupled with grocery stores that have incorporated natural food sections into the stores, have made it more challenging for Whole Foods to maintain its pole position in the market. As the market for organic foods expands rapidly, mainstream supermarkets are also competing for a slice of the pie. Strict government regulations and the lack of prime locations have made it more

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.”

In the United States, the food retail industry is absolutely massive. According to Statista, this industry brings in nearly 5.27 trillion dollars annually and 594.4 billion of that is from grocery store sales. In this market, the 20-ton gorilla in the room is Walmart, racking in nearly 20% of the entire market at around 118 billion dollars in 2013 according to the Harvard Business School case study. Following Walmart, Kroger and Costco own the biggest next largest slices bringing in 76 billion and 71 billion respectively. In this highly competitive market that has some of the smallest margins of any industry it can be tough to get ahead and even tougher to grow. However, Trader Joe’s has managed to pierce what was once a very small world

If they succeed, other companies will probably go the online rout as well. This temporary competitive advantage will contribute to above-normal profits for Grocery Checkout, until other grocery supermarkets nullify the advantage.

In some places, Whole Foods is commonly known as “Whole Paycheck.” While the firm has clearly positioned itself away from pricing issues, can it avoid the element of the marketing mix forever? Why or why not?

Grocery shopping is more diversified and evolved than ever before. Individuals across the nation have access to everything from exotic products to unique delivery services. Often, specialty stores have limited locations whereas specialty services have a limited reach. However, two retailers have expanded to hundreds of locations while adhering to unexpected market positioning for previously untargeted market segments. Whole Foods Market and Trader Joe’s have become household names while also innovating beyond regional and national traditional chains. Despite comparable size in

In the article, “Amazon Cuts Whole Foods Prices as Much as 43% on First Day” informs the reader about Amazon’s errancy to be at the top of the grocery store industry. On their first day of ownership, after buying Whole Foods, they cut their prices up to 43%. According to Jennifer Kaplan and Matthew Boyle, “Cutting prices at the chain with such an entrenched reputation for high cost that its nickname is Whole Paycheck is a sign that Amazon is serious about taking on competitors such as Wal-Mart Stores Inc., Kroger Co. and Costco Wholesale Corp.” (2017). The fact that Whole Foods sells all organic is a plus for them but and not so much help for their competitors since customers are able to buy healthier food at lower prices. This is just the

If we decide to do nothing, our competitors will outgrow us, and we could lose our international partnership, as well as have cutbacks on sales. If we do nothing to keep up with the forever changing in the retail industry, we will eventually be blown away because other retail stores are even going into, delivering your goods and services to your home. Other retail companies, such as Walmart, have even gone as far as, having the consumers make an order of what they need and bring it to their vehicles when they pull up to the stores. The market world is now shifting to a society of convenience. “Whole Foods Market must consider strategies to maintain growth despite a rising wealth gap” (Yuksel 2012). Doing nothing ever solves a problem. It is like saying, my tire is flat, so I will do nothing and hope that I can still ride around to where I need to go, and all will be solved. Soon, my vehicle would be out of commission. It would take a lot more money to fix the problem, instead of assessing the problem earlier and taking care of it. Going back to doing

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).

From reading the article I understood that since there is a lot of competition in the grocery industry the margins are low so the making of a grocery store to emerge can take long. If Amazon were to come up with a grocery store from scratch it would take long, merging with Wholefoods puts Amazon at a national level competitor. Another advantage, with the grocery stores already built and running Wholefoods, has many stores and at upscale locations. Amazon doesn’t have to worry about finding store locations. To take advantage of this, some customers who do not live near these upscale locations, Amazon can deliver which makes it convenient for every customer.

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.

E-commerce (electronic commerce or EC) is the buying and selling of goods and services, or the transmitting of funds or data, over an electronic network, primarily the Internet. These business transactions occur either business-to-business, business-to-consumer, consumer-to-consumer or consumer-to-business. The terms e-commerceand e-business are often used interchangeably. The term e-tail is also sometimes used in reference to transactional processes around online retail, (SearchCIO, 2015). In other words e-commerce is the buying and selling of goods and services online.

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.

The board of directors from Amazon.com is likely to take an approach of nominal participation with their executives. Whole Foods is a new acquisition for Amazon.com, but one that was already having great success. Bezos emplaced a company man at the helm of Amazon.com to make sure that the larger company interest was observed, and should to allow leading the way as a manufacturer and designer of an exceptional product.