Whole Foods Analysis

Olivia Persin

BADM 321

Whole Foods Analysis

        Whole Foods Inc. was founded on September 20, 1980 in Austin, Texas. It is an American foods supermarket chain that specializes in organic food. It is the worlds number one natural food store. It operates more than 400 stores throughout in US, Canada and the UK. In 2014, sales were $14.2 billion while they opened 32 new stores and expanded into 10 markets. United Natural foods is the largest third-party supplier. Some growth strategies include opening of new stores, acquisitions, and increasing same-store sales. Some major competitors include farmers market, Safeway, Trader Joes, and Walmart.  Their initiative is to “launch a new chain of stores next year under a separate banner that will be geared to appeal to Millennial, both in product selection and value prices.” They really want to target price sensitive consumers. Some disadvantages of this initiative is that Whole Foods may misread the Millennial consumers by steering them to the value concept. Also, they could cannibalize their current business because it could damage their market image. With that in mind, people may perceive that since their products are cheaper, people may think products are poorer quality. Whole Foods emphasize on organic and quality, rather than price and since their customers are less price sensitive, they may think the quality is worse. In contrast, some of the positives of this initiative is that Millennial consumers are price sensitive. Also, the unmet need for lower-price nature. Lastly, this initiative is a lifestyle brand and experiential shopping design through technology. Although this is a risky initiative for Whole Foods, they need to expand or else someone will and they may lose their customers.

        Other players like Walmart is also expanding and offering competitive prices. They are also expanding their product lines into healthier options. For instance, Walmart now has a larger selection of gluten free, which is major competition for Whole Foods because a few years ago, they were one of the few places that had gluten free options. As for Trader Joes, numbers are already showing that they are losing customers after the Amazon acquisition of Whole Foods. Trader Joes had similar prices compared to Whole Foods and they are going to need to make changes to get customers back. It is interesting because both of the stores are known for quality and natural foods, and I think in the long run, Trader Joes going to close down.