Wfm Risk Analysis

Target Market

Whole Foods Market mainly focuses on the US domestic market and its international market only contains Canada and United Kingdoms. The sales from the international market only take up 3% of WFM's total sales. In the following few years, WFM will still put most of its efforts on the domestic market and expanding to international market is not on the recent management schedule. If other organic competitors enter the international market and acquire large percentage of international market share, WFM may loss its leading retailer natural and organic foods status as it is in America.

Brand Image

Whole Foods Market relies heavily on its brand. Its customers are those willing to pay premium for more comfortable shopping environment and higher quality products. WFM has lowered prices on lots of known value items and extended value choices to its perishables departments. These measures may drive the sales growth in short term, but in long term, the decrease in price and introduction of cheaper products may affect Whole Foods Market's premium brand image and lead to the lose of affluent customers.

Supply Chain

United Natural Foods, Inc. accounts for about 31% of WFM's total purchase in 2011, and is WFM's single largest third-party supplier. Because of this concentration of purchases from a single third-party supplier, the disruption, delay or inability of UNFI to offer product to WFM may adversely affect its business. The UNFI has strong supplier bargain power and the changes in the availability of quality organic products could also impact WFM's operating results.

Economic Condition

The confidence and spending of the customers may be impact by the overall economic conditions. The economy remains sluggish, and there is no assurance that the economy can recovery in the future and bring back the consumer confidence and their discretionary spending. Factors such as interest rates, fuel costs, employment levels may directly affect the spending habits of customers. WFM's operating results may be materially impact if the consumers shift to lower-priced products and supermarkets in the downturn economic environment.

Marketing and Advertising

WFM