Whole Foods Inc. Strategic Management Review | An Academic Review of Whole Foods Strategic Decisions | Critical Strategic Milestones * Whole Foods Market founded in 1980 with 19 employees. (History, 2012 :1) * Whole Foods Market goes public on January 23rd, 1992. (History, 2012 :1) * 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) * In response to price competition from other large grocers Whole Foods launches its 365 Everyday Value product line in 1997. (Thompson, 2010; c-19) * In 1998 Whole Foods Market was name as of FORTUNE …show more content…
foods market. Customer preferences have shifted to looking for a higher quality product rather than what is most convenient. While not a controlling interest in the overall food market today, it is steadily growing with sales of $24 billion in 2008 in the U.S. and $52 Billion globally. Whole Foods accounted for .9% of total grocery sales in 2009. Customer preferences are slowly shifting to this higher quality organic produce. Competitors Intersections: Trader Joe’s is the most appropriate rival to analyze for this section of the report dealing with how rivals are coping with the marketplace and how their actions are impacting Whole Foods. Year ending 2009, Whole Foods had $12 Billion in sales, while Trader Joe’s was $8.0 Billion. They are the next closest rival to Whole Foods. Trader Joe’s offered no discount specials or coupons like Whole Foods did when the recession hit hard in 2008. This may be a major factor in why Whole Foods is doing so much better than them currently. Marketing impact of Whole Foods can be seen by a direct increase in sales since the recession hit. Trader Joe’s does incorporate a low cost strategy in the marketplace. They utilize a wide selection of house labeled items that are a significant value compared to the name brands. These house labeled items are still
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
This results from the fact that it is a mature segment with many well established companies vying for market share. The industry is highly consolidated and very fragmented. To grow their businesses, companies rely heavily on mergers and acquisitions to capture additional market share. Historically, the grocery industry has been characterized by slow growth which results in strong price competition and the development of aggressive marketing campaigns between existing firms. Perceived product quality and strong brand recognition by consumers are the basis of competition among firms in the industry. The source of General Mills’ competitive advantage lies in its ability to develop innovative products and highly reputable brands. As a result, they hold cost leadership positions across a number of grocery categories. Exhibit 1 shows the top US companies according to their sale of packaged foods globally. Market leaders include Kraft Foods, PepsiCo, Nestle, Mars, Kellogg, and General Mills, however, neither company possess an overwhelming share of global sales. This is in part due to the large degree of product diversity throughout the industry and the strong brand rivalry of each competitor’s labels.
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
This report is written in order to perform financial analysis on Whole Foods Market Inc and its competitor Safeway Inc. This in depth report is both to determine which company is doing financially better and how also how they are doing comparing them to their whole industry.
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)
In 2004, Whole Foods expanded globally when they acquired the Fresh & Wild chain of seven natural food stores in the United Kingdom. In 2007, they opened a three level store in West London. (Whole Foods Market History)
One of Whole Foods main strategic issues is how it should sustain positive growth in sales. Sales growth in 2008 was 0.8%, compared to sales growth increase of 8.2% in 2007. However, much of these low sales growth figures were at the former Wild Oats stores rather than the stores that Whole Foods Opened. This is definitely a strategic issue because Whole Foods’ current strategic model is not showing positive sales growth. From $203 million in 2006, it fell to
Whole Foods Market, incorporated on August 15, 1980, is the world’s leading retailer of natural and organic foods and America’s first national “Certified Organic” grocer. Since 2012, Whole Foods Market operated 335 stores in the United States, Canada, and the United Kingdom. Depend on 2011 sales rankings from Progressive Grocer, Whole Foods Market became the largest retailer of natural and organic foods in the U.S. and the 11th largest food retailer overall. Today Whole Foods Market consists of 32000 employees and owns stores average 38,000 square feet in size and 10 years in age, and the scale of Whole Foods Market is continue growing through mergers, acquisitions and new store opening
Whole Foods strategy performed sound well from a strategic perspective. Whole Foods Market became a leader in the organic and natural retailer WFM’s strategy seems to have produced a successful outcomes. Whole Food Market has totally 379 stores with 15 000 square feet- 75000 squared feet in 2014 and become the largest and biggest retailer in the organic and natural segments. Whole Food Market picks target metropolitan areas with the growth of 10-23 stores per year since 1991. These stores often located in the high – traffic shopping locations on premier real estate site.
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).
Whole Foods Market was established by four businessman that wanted to create a supermarket which sells all natural food. The four businessman are John Mackey and Renee Lawson Hardy, the owners of Safer Way Natural Foods, and Craig Weller and Mark Skiies, the owners of Clarksville Natural Grocery. The first Whole Foods Market was launched in 1980 in Austin, Texas, with 19 workers. Who The company grew from a local organic and natural supermarket into the market leader of organic and natural foods which consist of 41 branch spread across United States, UK and Canada.
Whole Foods is ranked the 8th largest public food and drug retailer in the United States with a current ranking of #218 on Fortune 500. Whole Foods continues to perform at its very best with reported sales growth in the year 2013 of 7%, Net sales of $12.9 billion, Operating income of $883 million and an Operating Margin of 6.8% they continue to produce gains year after year. During the year 2013 the company returned $633 million to shareholders through share buybacks and dividends.
Whole Foods Market is a chain of supermarkets that was founded in Austin, Texas in 1980 with the idea of selling higher quality, less processed products. Their first store in New Orleans opened in 1984, and since that time they have expanded to include 479 stores throughout the United States, Canada, and the United Kingdom. The high standards that Whole Foods has put in place and preference for selling USDA-certified organic foods have helped position the company as an ecologically and environmentally responsible grocer and has allowed them to stand out among their competitors.
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.
Whole Foods Market is one of the most successful companies in the organic foods sector. The company was established in 1978 with a small natural foods store. The owners started this business in the attempt to develop a natural foods store chain in the U.S. In order to reach this objective, the small company had to merge and to acquire other small businesses that were necessary in order to expand the business. Some of the companies that Whole Foods Market acquired or merged with are represented by Wellspring Grocery, Bread & Circus, Mrs. Gooch's, Merchant of Vino, Allegro Coffee, Harry's Farmer Markets, Fresh Fish, Wild Oats Markets, and others.