Whole Foods is recognized as one of the nation’s healthiest retail grocery stores. Whole Foods is devoted to seeking out the finest natural and organic foods available, maintaining strict quality standards, eating healthy, and being committed to the sustainability of the entire ecosystem (Whole Foods). The company was founded in Austin, Texas in September 1980 when Safer Way Natural Foods merged with Clarksville Natural Grocery (Whole Foods). Starting in 1984 Whole Foods began its process of expanding by first acquiring competitors in neighboring states, and then by merging with competitors across the country. In the 1990’s and early 2000’s Whole Foods continued to expand by acquiring several large competitors, including UK based Fresh & Wild, which was the number one organic food retail chain in the UK. Perhaps the largest overall acquisition was Wild Oats, who merged with Whole Foods in 2007 at a cost to Whole Foods of $565 million. On January 23, 1992 Whole Foods made its first appearance as a publicly traded stock. The company’s stock price reached an all-time high in 2012, generating $1.3 billion in cash, which was the company’s strongest financial performance year in their history (Whole Foods). Currently, Whole Foods Market is the largest natural and organic grocery retailer in the United States, and the twelfth largest grocer overall. In 2013 Whole Foods operated 362 stores in the United States, Canada, and the United Kingdom, with an average of seven million visitors each week (Whole Foods). Whole Foods has generated quite a list of accolades in its 30 plus year history. The company has been listed in the Fortune ‘100 Best Places to Work’ since the lists inception in 1998 (Whole Foods). In April, 2005 Whole Foods appeared in the Fortune 500 list at number 479 (Whole Foods). Whole Foods has also been recognized by the EPA and Department of Health for their efforts to reduce the company’s carbon footprint, promote green technology, promote healthy eating habits, and increasing awareness of sustainability in the fishing industry (Whole Foods).
The grocery and supermarket industry has become very competitive since the late 1980’s. In 1988 traditional grocery market shares hovered around 90%, but these numbers have fallen greatly, with recent studies suggesting that market shares have dropped to about 50% (Associated Press). The second biggest shift in market share over that time was in the non-traditional grocery stores increasing from 2.5% market share to 33.4%. Non-traditional stores are those which have certain niches which meet a specific customer demand. Jeff Noodle (Supervalu CEO) said in 2007 “It’s not always about everyday low pricing” and continued to say that customers are drawn by “a combination of many factors.” Two of the factors he referenced were specialty and organic foods. In response to the demand in this niche market, many traditional retailers and big grocers are including specialty and organic food sections in their stores (Associated Press). This transition is forcing competition in the market, grocers are forced to try and provide a solution to each of the different niches in order to maintain and grow their market share. The demand for specialty and organic foods can be seen with the increased competition and increasing sales of these products. According to the USDA, sales of these items have risen from $11 billion in 2004 to $27 billion in 2012 (Fraser, 2013). Whole Foods operates over 360 stores and are well positioned to capitalize on the growing demand for specialty and organic foods. Walter Robb, co-chief executive officer of Whole Foods, explained that due to their continued increase in market share they anticipate a demand for 1000 Whole Food Market Stores in the near future (Gomez, 2013).
3. Key Success Factors
In the grocery industry there are several success factors which are vital for any firm which hopes to maintain or...
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