Whole Foods Market, Inc.

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

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 1978, John Mackey and Renee Lawson borrowed $45,000 from family and friends to open a small natural foods store called SaferWay in Austin. Two years later, Mackey partnered with Craig Weller and Mark Skiles to merge SaferWay with the latter’s Clarksville Natural Grocery, resulting in the opening of the original Whole Foods Market (WFM). Since then, WFM has expanded to 466 stores in the U.S., Canada, and the United Kingdom, averaging over nine million customer visits each week. “The company has always represented the highest quality, selection and service while still offering prices customers are willing to pay on premium products”. (Whole Foods Market,

* Whole Foods Market was founded in 1980 working with natural and healthy foods in Austin, Texas; it’s one of the world’s largest of natural and organic foods supermarkets. In 2009, the sales total $8 billion and had 289 stores in the U.S. The Whole Foods Market plans to come up with strategies to help improve the company but to do so understanding the core values plays a major role in the company’s planning. The strategies

After dropping out of the University of Texas in 1978, John Mackey and friend, Renee Lawson (Hardy) were able to borrow $45,000 from Mackey’s family to open a small health food store, Safe Way Natural Foods, in Austin, Texas. A few years later in 1980 they met Craig Weller and Mark Skiles, who owned the Clarksville Natural Grocery, they decided to merge their stores. Thus Whole Foods Markets was born.

In technological factor and sociocultural factor, as grocery delivery should become a new trend, Whole Foods also respond to this by applying online grocery shopping even though they are a little slow responder compared to their competitors. Whole Foods appears to have the ideal customer base which can benefit from such a service as its shoppers tend to be high-income, urban, and willing to spend a few extra dollars to save time. This could benefit Whole Foods if they can figure the aggressive and effective way to develop this. The most successful new promotion may be its digital coupons, a program that was launched on January 28th. Daily downloads of the Whole Foods app jumped up to 5 times in the period after the coupons were introduced.

Consumers view Whole Foods Markets as being very expensive and have given the retailer the nickname “Whole Paycheck”. Whole Foods carries a wider variety of organic foods and healthier brands besides their private brands. Whole Foods is experiencing a decline in sales due to other stores; like Wal-Mart, who are stocking organic foods at much lower prices; which has decreased differentiation (Lutz, 2014). Its decentralized business model decreases efficiency in procurement, distribution, and marketing efforts.

Amazon: The recent acquisition by Amazon presents the opportunity for Whole foods to benefit from a rich supply chain and to update and modernize their digital presence.

In order to achieve success, the first thing any business needs to consider is a proper, strategic business model, which is a concise description of how a business intends to generate revenue. Whole Foods' business model consists of maintaining the motivation along with the happiness of their team members which leads to efficient innovation and customer service. This process allows Whole Foods to give back to their communities, resulting in motivated investors, high quality products, and good value. Whole Foods appears to follow a strong business model, yet the key to their success relies on their competitive advantage in the market place. Any company is capable of holding a competitive advantage as long as the company or product provides

By reducing the size of the newly developed stores, it would be logical to believe that development costs could return to values in the mid $100 millions. In addition, these new “discount” stores would seek a much different target market. The newly branded stores would target everyday people who frequent stores such as Kroger, Trader Joe’s, and Costco. In targeting a different market, the positioning of the stores must be far and away from the original plan of seeking affluent and high-traffic areas. It would behoove Whole Foods Market to place the new storefronts in areas that Wal-Mart seeks to find, areas belonging to the lower and middle class, as this makes up the largest share of

* In 1996 Whole Foods Markets acquires Fresh Field Markets picking up 22 stores located on the east coast and Chicago area for 4.8 million shares of common stock and an option for 549,000 additional shares. (Thompson, 2010; C-13)

Whole Foods ' strong brand identity is likely its greatest source of competitive advantage. The company has successfully established itself as the leader in the organic and natural food segment, and has invested heavily in store quality and customer service. These factors differentiate it from other grocers and have fostered a relatively loyal customer base that is assured of WFM’s high quality products and services. Maintaining this advantage will be essential in preserving the franchise’s competitiveness despite the increase of other companies offering natural and organic products.

Whole Foods Market is the leading natural and organic foods supermarket. They are the first national “certified organic” grocery store. 2015 might have been the worst year in the history of Whole Foods Market. Comparable sales had declined for the first time since the recession. There was a humiliating scandal involving mislabeled weights and prices, and the attacks from rivals Kroger Inc., Costco Wholesale and Trader Joe’s only seemed to increase. This resulted in Whole Foods’ shared price plummeting 36%. This was a decline that would have been worse had a late-year buyout rumor no circulated. Whole Foods had diminished this rumor. Moving into 2016, there seemed to be a reason to be optimistic even with the descending momentum and flat comparable sales forecast. In 2016, Whole Foods debut the 365 chain. This was really a jump start for Whole Foods stock at the beginning of 2016. The budget friendly 365 chain allowed the company to reach different demographics and provided a larger range of real estate options, enabling it to open in neighborhoods that may not be fit for one of their full line stores. The 365 is the best solution to stores like Trader Joe’s. “We are continuing to make measurable progress on fundamentally evolving our business including the successful launch of our new 365 format, expanded value investments, and increased efforts to better understand and provide personalized offers to our customers. We are seeing some encouraging signs in terms

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.