Report of Whole Foods Market and its
business unit of grocery store locations
Date: October 26, 2013
Subject: Whole Foods Market Inc.
The scope of the project is a study of Whole Foods Market and its strategic alignment in the organic/natural food and beverage industry. The following report will explore challenges and opportunities this company faces and recommendation for growth.
The scope of our work to prepare this report includes:
Reading industry surveys
Reviewing trade journals about this industry
Researching current articles about Whole Foods Market
Based on the case study and the research that we did, we conclude that: 1. Whole Foods Market must continue to grow its private label brands to appeal to more budget conscious shoppers. 2. Whole Foods Market should develop a customer loyalty program that rewards customers with incentives. 3. Wholes Foods Market should expand their online shopping and click and collect programs to remain innovative and relevant in this technology driven society.
Description of the business being studied:
The business being studied is Whole Foods Market which is a part of the supermarket and other grocery industry. Its NAICS code is: 445110
Founded in Austin, Texas, in 1980, Whole Foods Market pioneered the supermarket concept in natural and organic foods retailing. It is currently the world's #1 natural foods chain. Whole Foods Market established its name through the term ‘whole foods’ which are foods that are unprocessed and unrefined, or processed and refined as little as possible, before being consumed. Whereas it now carries some 2400 items in four lives of private-label products and outsources locally for food and other items that are free of pesticides, preservatives, sweeteners, and animal cruelty. Its retail network includes today more than 340 stores in North America (USA, Canada) and in the United Kingdom. With over 72,000 employees worldwide it generated sales of over $11 billion in 2012. Whole Foods had a 3.69 Net Profit Margin in 2012 which was well above the industry average of 1.44 and surpassing all of its main direct competitors (hoovers.com)
Whole Foods Market is a dynamic leader in the quality food business that has made a declaration of interdependence to emphasize how important its suppliers, customers and stakeholders are for its success and growth. The company motto — Whole Foods, Whole People, Whole Planet — emphasizes that the vision reaches far beyond just being a food retailer. Their success is measured by the customer satisfaction, team member happiness and excellence, return on capital investment, improvement in the state of the environment and local and larger community support. They acknowledge that they are “not a fully self-sustaining ecosystem. There are hundreds of other businesses that we depend on to assist us in creating an outstanding retail shopping experience for our customers”. A very socially conscious business, it is intimately tied to the neighborhood and larger community that it serves and contributes largely to charity. Whole Foods also actively seeks to continually decrease its environmental footprint and seeking sustainability.
Whole Foods Market is within the extremely competitive and maturing supermarket and grocery industry among top competitors like Kroger, Wegmans, Sprouts and Trader Joe’s (Hoovers, 2013). These companies face multiple external factors that affect their business. These include political and economic trends as well as changing demographics, consumer tendencies, and technological advances. The expiration of the payroll tax cut on January 1st 2013 and the reduced government spending due to the sequester in March affected their business (Agnese 2013). Economically, consumer confidence felt a boost due to the “wealth effect”. Lower gas prices, lower food inflation,...
References: Gottschalk, Ingrid (03/01/2013). "Consumer reactions to the availability of organic food in discount supermarkets". International journal of consumer studies (1470-6423), 37 (2), p. 136.
Hitt, M, Ireland, R., Hoskisson, R. (2007). Strategic management: Competitiveness and globalization: Concepts (8th Ed.). New York: Thomson/South-Western.
Lytel, Kipley J. “Independent Investment Research.” Spelman Research Associates.
“Organic Food Trends.” Feb. 2008. http://www.agmrc.org/
Organic Trade Association, Retrieved from http://www.ota.com/
Southworth, George. “Natural/Organic Industry Outlook.” Cooperative Grocer. Sept.-Oct. 2001.
Whole foods market debuts whole paws line of pet food. (2013). Food and Beverage Close - Up, Retrieved from http://search.proquest.com/docview/1439672365?accountid=27354
US Department of Agriculture, Retrieved from http://www.usda.gov/
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