In recent years’ consumers have turned their attention to a healthier way of life and the so called “health-related labels” in products. The healthier body effect delivered by organic and natural foods has became a worldwide mission to many consumers and competitive firms. As previously noted this awareness is expected to increase up to 16% by 2020 (Burnaby, 2015). In order to understand the relationship between higher product quality and supply; reflecting in increase in price and the fluctuation, if any in demand, we will analyze revenue growth, sales, customer behaviors and the price elasticity of demand a company like Whole Foods has experienced for the last 5 years. As noted above this The graph below illustrates the total revenue the
Whole Foods Market can experience cannibalization from their 365 stores and their own Whole Foods Market stores. The 365 stores have three locations opened. The first store opened in Los Angles in May 2016, the second location was opened “two months later in Lake Oswego, Oregon in July and a third store was opened two months later in Bellevue, Washington in September of the same year.” (1) Additionally, the Whole Foods Market plans to opened sixteen locations including two on Texas and three on the south of California. (Exhibit 1)
Trader Joe’s, a specialty store, and Whole Foods Market, an upscale grocery store, are in the running as well. Whole Foods focuses on natural and organic products, and Trader Joe’s provides unique product selection and other quality products, as well as a unique customer experience. Fortunately, H-E-B has maintained a strong position in the industry, but they must continue to prioritize their pricing, quality, and customer experience, ensuring they meet their consumer needs to stay afloat in the vastly changing industry. H-E-B’s current strategy consists of many aspects that focus on customers, innovation, and the community. These components have allowed H-E-B to remain in the competitive position it has in the market.
Whole Foods has been struggling for quite sometime now, this is because of several things. Whole Foods was caught overpricing its customers and has been trying to reshape its image for two years now. For example their vegetable platters were on average overpriced by $2.50 and their chicken tenders were overpriced by an average of $4.13. This led to a lawsuit of $800,000 and extremely bad press, where people began nicknaming it as “Whole Paycheck”. Around the same time the company’s stock fell by over 40 percent.
1. Opening a series of new supermarkets, such as 365, affects many items in both the income statement and the balance sheet. When it comes to the income statement the main accounts that are affected are revenue, cost revenue, and multiple operating expenses. To start, the main goal of Whole Foods by expanding their company is to create more sales causing the revenue account of the income statement to increase. However, another factor that will increase would be the cost of revenue.
PROBLEM IDENTIFICATION Whole Foods Market was created as a grocery store to serve as providing healthier options for consumers (Whole Foods Market History, 2016). Whole Foods has recently begun a target of the younger demographic, such as millennial that are increasingly becoming more concerned with the food they are putting in their bodies (Low, 2015). However, there is a large shift happening within the retail industry, including grocers concerning consumer behavior (Lewis & Dart, 2010). The problem Whole Foods is having though is the lack of adaption they are having to the changing society. Having a younger demographic with such high price and quality items is causing a disconnection with consumers and brand loyalty.
Grocery stores are an important business in our lives that we fail to look further into, just like with everything else businesses provide for us. However, grocery stores provide for us in a different way than most normal businesses. They provide the necessities we need for our lives. When these necessities become even more important to us, consumers turn to selective grocery store outlets and look for the highest quality of foods to provide for themselves and their families. This is where Whole Foods Markets steps in and provides for these very people.
Based on the data presented in Exhibit three and four, from a strategic perspective it is clear that Whole Foods market is performing exceedingly well. Right now they have the competitive advantage over their other rivals. One reason Whole Foods has this competitive advantage is due to the fact that the sizes of their stores are bigger than their rivals. “Whole Food 180 stores average about 30,000 to 36,000 square feet, which is much larger than that of its nearest competitors” (Whole Foods Economy, 2017). This aids the company in offering a larger assortment of merchandise and gives them a larger inventory.
Whole foods has made it into our conversations one way or another, speaking on behalf of the expense that Whole Foods has decided to decrease for their buyers to be more competitive to the more commonly visited grocery stores such as Wal-Mart and Kroger, or their involvement with Amazon Prime and it’s members to better deliver fresh, wholesome ingredients where ever you need it. Unlike most grocery stores, Whole Foods also provides many prepared lunches and dinners that you can taste test and pay by the pound, and most locations have a burger bar, wine bar, dessert bar and sushi bar. The options are endless when going into a Whole Foods, and due to the amount of grocery stores that are just as well selling organic products now, the choices
Whole Foods Market has differentiated from other retailers by their high quality of natural and organic foods which attracted many customers. However, little by little competition started to rise. Customers were able to find organic foods in supermarkets, grocery chains, and warehouses. For example, WFM major competitors include Kroger’s, Walmart, Costco Wholesale, Trader Joe’s, and Sprout. Competitors are strong because they have created their own organic private labels which have attracted many WFM customers.
Key elements of the company’s growth strategy are the opening of new stores, acquisitions, and increasing store sales. Whole Foods strives to promote a strong company culture featuring a team approach to store operations that they believe is distinctly more empowering to team members than that of the traditional supermarket. Whole Foods Market stores each generally employs between 55 and 650 team members who make up approximately 10 self-managed teams per store. Each team is led by a team leader and each team is responsible for a different product offering or aspect of store operations such as prepared foods, grocery, or customer service, etc. Whole Foods also promote a decentralized approach to store operations in which many decisions are
Firstly, strategy that we would like to mention is growth strategy. According to the case, Whole Foods' growth strategy had been to expand via a combination of opening its own new stores
INTRODUCTION: Understanding the Cultural Repertoire of Ethical Eating Whole Foods Market (hereinafter known as WFM) is one of the most profitable health food retailers in the United States. It claims to be the first national “Certified Organic” grocer (Whole Foods Market, 2016). Since its incorporation in 1980, the company has expanded internationally (it has its existing operations spanning the U.S., Canada and the U.K). John Mackey, founded WFM by merging SaferWay with Clarksville Natural Grocery in Austin, exactly two years after opening SaferWay.
1. What are the chief elements of the strategy that Whole Foods Market is pursuing? Since the inception of whole foods back in 1980 by John Mackey their strategy has been summed up in one motto “Whole Foods, Whole People, Whole Planet”(pg 376). The main elements of the strategy that Whole Foods is providing accessibility to its customers to the finest and highest quality of organic and natural product this world can provide.
Earlier this summer, e-commerce giant Amazon announced that it would be buying high-end organic grocery chain Whole Foods for $13.7 billion; the deal officially closed at the end of August. While the acquisition has been off to a rocky start, it gives Amazon hundreds of physical stores and provides the company a strong entryway into the competitive grocery and food industry. Amazon has proved that the acquisition with Whole Food was the best that was ever done. Amazon surprised shoppers with its acquisition of the grocery chain. It proved Amazon was serious about operating old fashioned brick-and-mortar stores at a large scale.
