Whole Foods Market Business Analysis

Sales have doubled since then and 66% of the British adults now consume organic food and drinks. Their weakness Is the fact they haven’t expanded Into the global market except for Canada and the ASK. There has also been several recalls on brands purchased by the company. The opportunities appear to be significant In this retail market. There Is an Increasing desire for organic, healthy products which bodes well for the success of opening new stores. The threat is competition as the demand grows and more stringent regulation. Rental increases is also a concern.
In making a decision on whether to invest in Whole Foods Market, the welfare and needs of the internal and external stakeholders need to be considered. Growth depends on Bonds and Stockholders. The company must show consistent growth in order to be able to have available borrowing outlets. The employees are instrumental in keeping the customer feel wanted and satisfied with their shopping. The surrounding community wants to feel compatible with Whole Foods facilities, products and service. And the distributors supplying the company’s product need to know there Is a commitment from their customers.
Whole Foods Market is a unique, organic food and natural product supermarket chain located in the US, Canada and ASK. As a wholly owned subsidiary, they are headquartered in Austin, Texas and employ approximately 64,200 people: 13,300 are part-time and 2,700 temporary employees (Denominator, 2012, p. 4). They have an increase in revenue in 2011 from the previous year of 12. 2%, an increase of 25% in operating profit and net profit increase of 42%. (“Event Brief of IQ , 2012 Whole Foods Market Earnings”, 2012).

These figures are significant in recognizing the company’s success in recovering from the recession which hit them In 2008. Presently, the organic food market Is fragmented with many small mom and pops which presents many opportunities for growth by Whole Foods. Fred Meyer, a discount chain, carries an Increasing array of organic foods, but not the quality and quantity of their high end competitor. The company’s strength is in its focused growth plan. “The new store openings has enabled it to grow at a compounded and annual growth rate of 26% during 1991-2011”. Denominator, 2012, p. 6). They have formalized their square footage for new and renovated stores by past analysis of their successes and allures. The expansion into the I-J market, in particular the 2007 acquisition of 80,000 square feet in London could be a major step into a market outside of the US. Sales have doubled and 66% of the British public consumes organic food and drink. (Live Business News, 2012, p. 3) Their weaknesses lay in lack of expansion into international operations, product recall of certain brands, and increasing rental costs.
Recalls are an issue. They have had to withdraw Whole Foods Market Dairy Free bakery products because it contained milk which was not on the label. Texas had to call cheddar cheese products because of an e-coli contamination and there was a possible Salmonella contamination for the Whole Foods, Carob Energy Nuggets in 2009. They have not been able to successfully expand into markets other than a few stores in Canada and the I-J. They have not been able to obtain competitive prices from their distributors for these stores because of the low volume.
Whole Foods also has a weak advertising budget and relies heavily on Internet and word of mouth, a disadvantage when their competitors advertising strategies are expanded into other markets. (Live Business News, 2012, p. 7) Leases for space and equipment have increased significantly from 4. 8 million in 2004 to 201 million in 2007. Future growth could be impacted. The increasing demand for organic foods and the new emerging life styles of the American public appear as great opportunities for Whole Foods Market. “According to industry estimates, the sales of organic food increased three fold since 2000 to exceed $28. Billion in 2010” (Denominator, 2012 p. 7) With this increase in sales, the company is still the only chain catering and available to this market. They are continually expanding their product base to include such foods for customers with facial dietary needs. The trend of the American family is moving towards eating at home and eating healthy. Competition in the food retailing market is intense. Currently, Whole Foods does not experience significant competition in the organic food, natural products, and vitamin supplement area. But, as the demand and desire grow, so will the competition.