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.
Despite the success of the business, Trader Joe's faces the challenge of rising costs in the international market and the increased cost of doing business in the United States. The company overcomes these challenges by reducing the products that are not making any profit or which have a high turn-over rate as compared to other fast moving food products. Trader Joe’s can resolve these challenges by searching for manufacturers offering the same quality food and groceries at a low price so that the company can sustain and compete in the giant grocery store
Trader Joe's, founded on the idea of unique product offerings at a great price, is amongst the top performers in the supermarket industry. The company utilizes a combination business-level strategy by focusing on both the cost leadership and differentiation strategies. The target customer segment is broad and includes all consumers who purchase grocery items. Although most consumers of Trader Joe’s enjoy the healthy options offered and compare the company to smaller niche supermarkets, any consumer can shop at the various locations. Within this segment, Trader Joe’s utilizes the value of the products as well as unique offerings compared to those available from competitors to set itself apart.
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.
To remain competitive, Whole Foods needs to focus on the differentiation and offering of more unique products and experiences. Whole Foods will likely expand its private label brands, which currently account for a significant portion of its sales. This will help the company maintain its margins and differentiate itself from other retailers. Whole Foods will continue to leverage technology to improve the customer experience, such as through online ordering, delivery, and personalized recommendations. As more consumers adopt plant-based diets, Whole Foods will likely expand its offerings in this category, including vegan and vegetarian prepared foods, plant-based protein sources, and non-dairy alternatives.
Today, they are the world's pioneer in regular and natural nourishments, with more than 310 stores in the North America and the United Kingdom (About Whole Foods Market). During its 31-year history, Whole Foods Market has been a pioneer in the normal and natural nourishment development over the United States. John Mackey, the company's prime supporter and CEO, trusts that Whole Foods' quick development and business sector achievement has much to do
Some suppliers feel as though Whole Foods’ changes are rushed and confusing. Some smaller businesses, like Kitchen28, who once wanted to expand to the Whole Foods stores, find difficulty in doing so because of the tighter management of shelf space and started selling product at other places. Other businesses are taking advantage of Whole Foods’ adjustment period. For example, Kroger Co doesn’t require smaller businesses to pay a fee to sell their products in store. Walmart also has been said to treat incoming suppliers as a partner.
Whole Foods on the other hand gives out high quality food which has been expired. Although these facts don’t necessarily say either company is bad, they do say that they are willing to fulfill their duties even with expired food, which many times will last a lot longer than what the package says. Analysis on Care and
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.
Whole Foods 365 stores were a product introduced by Whole Foods Market in 2015 when Jeff Turnas, president of the 365 store chain, announced that the organic food giant would soon launch the stores. Turnas’ vision for the 365 stores was “a new innovation to help meet the exploding demand for more natural and organic foods: a smaller-store concept where value meets quality… We'll work up a modern, consistent design, use innovative technology and carefully choose just the right product mix to ensure an efficient and rewarding shopping experience.” (Turnas 2015). Turnas’ goal was to create a path for grocery shoppers, particularly the millennial generation, that aligns with their mastery of and reliance on technology to streamline their daily
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.
