Whole Foods Market: The biggest retailer of organic and natural foods in the world
Whole Foods Market has a strong emphasis on perishable foods, designed to appeal to natural and organic food shoppers. It aspires to become an international brand synonymous with natural and organic foods, and the highest quality food retailer in every community in which it is located. While other large grocers struggle and face uncertain futures, Whole Foods Market has been seeing revenue growth.
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Whole Foods Market's growth strategy resulted in a sales compound annual growth rate (CAGR) of 26% during 1991–2011. The company faces intense competition from other organic grocers and traditional retailers, which could cause loss of sales, reduction in margin, or greater operating costs.
While the overall US food industry contracted in 2011, the organic foods market increased by 9.5%, reaching $29.2bn. Private label brands accounted for around 17.4% of US food product sales in 2010. Whole Foods Market's total private label sales accounted for approximately 11% of its retail sales in FY2011 and FY2010.
Your key questions answered
- Which is the largest organic food retailer in the world?
- What are the opportunities and threats in food retailing? What is the size of the US food market?
- What is the market share of private label products? Is Whole Foods Market positioned to continue to thrive?
Table of contents
The largest organic food retailer in the world
The US’s first certified organic grocer
Expansion through mergers and acquisitions
A mission-driven company
Sales CAGR of 26% as a result of focused growth strategy
Opportunities and threats in food retailing
The US food market reached $664.1bn in 2011, with organic sales up by 9.5%
Strong growth opportunities ahead as health awareness is rising
Private label products generate 21.6% of total food products sales
Whole Foods Market faces competition from organic grocers and traditional retailers
All products labeled as “organic” in any form must be certified
Is Whole Foods Market positioned to continue to thrive?
Emphasis on fresh, healthy food – “America’s Healthiest Grocery Store”
$10m budget to promote local food production
Eco-friendly approach does not end at food products
Whole Foods Market spends only 0.4% of its sales revenues on marketing and advertising
“Health Starts Here” launched at all locations in the US, Canada, and the UK
Third-party partner programs – individual nutrition and health assessments combined with personalized eating plans
Emphasizing the value of nutrient-rich foods with in-store education
Team member support and healthy incentives
Whole Foods Market stores are designed to reflect local communities
An average Whole Foods Market store carries 21,000 SKUs
Private labels generate 11% of Whole Foods Market's retail sales
Right size store for each location – 29% more profit per square foot in 2011
Whole Foods Market plans to open up to 32 new stores by 2013
Balancing prices to beat the “Whole Paycheck” image
Product recalls affect Whole Foods Market's brand image
About 97% of Whole Foods Market’s operations concentrated in the US
Supply disruption may materially affect Whole Foods Market's operating results
Rental expense of more than $300m and increasing
Market penetration smaller compared to competitors
Growth strategy resulting in 33% profit increase and 8.7% sales increase
Providing the healthiest foods is simply not enough
Whole Foods Market is well positioned to benefit from the expanding organic foods market
Intense competition can cause loss of sales
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