Wholefoods CaseThe food retail business is a largely competitive business with many different companies vying for attention from the public. You have your small, privately owned stores, your regional chain businesses, large nationwide chains, specialty health, organic or vegan stores and everything in between. With operating only 347 stores nationwide, Whole Foods relatively makes up only a small share of the grocery store market in the United States. That said, Whole Foods is one of the few chains that has a true nationwide reach, operating stores in 40 of 50 states as well as multiple stores in the District of Columbia. To that end, let us turn our focus primarily to the national competition facing Whole Foods Market.
The Competition:
In the past, there was competition in the food supply chain. Even when Whole Foods offered small, organic, whole-foods stores in other states, they were often forced by their own regulators to adopt different and even wholly foreign standards to carry a product such as processed meat or eggs. In many states, Whole Foods had to fight with the courts and get away with it because Whole Foods needed to build a fast-growing business that could compete in the grocery store markets, unlike larger chain retailers. It was very expensive to produce organic goods and produce a healthy, sustainable food supply in a state that was far off from national standards. However, Whole Foods needed to build the businesses that could push competition there from their own markets.
The Federal Food Authority, which was created to serve the grocery market and enforce the laws of the U.S., mandated that all stores operated by Whole Foods be “furnished with the natural characteristics necessary to promote the continued development, production and consumption” of their local foods and with “adequate or no animal testing at all.” But these standards were not strict enough to support Whole Foods and its current business, making it a problem in the eyes of many consumers who had never even heard of them.[40]
Whole Foods and Other New Retail Chains
Whole Foods is an interesting case study in a long line of new and growing chains: Whole Foods New York, Whole Foods (NYSE: WO), Costco (NYSE: C.S.), and most recently Whole Foods (NYSE: W) and Walmart (OTCPH: WX). These new and growing chains have been seen opening their doors into consumer markets to make a profit. The reason given by many of these chains is that they focus on one core customer: small, organic, whole-foods outlets on the mainland of the United States. They see that many consumers see an area of the Whole Foods market that has long been neglected[41], and that, if they go grocery shopping in their own stores, they want to see those small stores become the grocery stores their neighbors want them to be.
In 2011, the United States Department of Agriculture released a report that highlighted the lack of adequate testing to demonstrate the safety of the safety of the food in question. These two reports revealed that when food was tested properly, it appears that there was no evidence that there was or was not a health risk.[42]
A growing trend in the grocery store industry has been to use tests like those found in Whole Foods to identify the kinds of store environments. Some of these include supermarket tests, such as Whole Foods Market or Whole Foods Market Basics. These tests are far more stringent and require extensive training to ensure compliance and are also widely available online. Additionally, some Whole Foods stores are now using the new testing methodology in an effort to improve consumer awareness of
The Competition:
In the past, there was competition in the food supply chain. Even when Whole Foods offered small, organic, whole-foods stores in other states, they were often forced by their own regulators to adopt different and even wholly foreign standards to carry a product such as processed meat or eggs. In many states, Whole Foods had to fight with the courts and get away with it because Whole Foods needed to build a fast-growing business that could compete in the grocery store markets, unlike larger chain retailers. It was very expensive to produce organic goods and produce a healthy, sustainable food supply in a state that was far off from national standards. However, Whole Foods needed to build the businesses that could push competition there from their own markets.
The Federal Food Authority, which was created to serve the grocery market and enforce the laws of the U.S., mandated that all stores operated by Whole Foods be “furnished with the natural characteristics necessary to promote the continued development, production and consumption” of their local foods and with “adequate or no animal testing at all.” But these standards were not strict enough to support Whole Foods and its current business, making it a problem in the eyes of many consumers who had never even heard of them.[40]
Whole Foods and Other New Retail Chains
Whole Foods is an interesting case study in a long line of new and growing chains: Whole Foods New York, Whole Foods (NYSE: WO), Costco (NYSE: C.S.), and most recently Whole Foods (NYSE: W) and Walmart (OTCPH: WX). These new and growing chains have been seen opening their doors into consumer markets to make a profit. The reason given by many of these chains is that they focus on one core customer: small, organic, whole-foods outlets on the mainland of the United States. They see that many consumers see an area of the Whole Foods market that has long been neglected[41], and that, if they go grocery shopping in their own stores, they want to see those small stores become the grocery stores their neighbors want them to be.
Whole Foods in North America. (SAC) Whole Foods in North America can be accessed by accessing the online shopping information available on this page. (SAC)
Whole Foods is currently the 4th most profitable chain of retail chains in the United States, with revenues exceeding $3 billion a year.[42] In April of 2014, retail sales of Whole Foods increased 8% (after excluding non-union service) and sales within the entire retail chain (whole foods sales) surpassed $4 billion[43]. In addition to the increasing revenues for these chains, Whole Foods also continues to grow. (SAC) However, we can see that the chain has yet to grow its profit margin from the expansion of sales to the current level, particularly in the near term, when the total U.S.[44] We have seen the growth the chain has experienced relative to the recent expansions of its stores.
[1] The total revenue generated in 2012 for Whole Foods in the North America, Europe, and Asia portions of the category of U.S. retail chains is $939 million, $943 million, $975 million, and $1.839 million, respectively. The annual margin is based on the number of shoppers attending different locations during the same quarter, compared to the annual average margin for all U.S. retail chains.
[2] The cost of living includes the cost of living costs for the consumers purchasing them, such household spending such as food, utilities, and living expenses including utilities, transportation, and other property taxes.
[3] The average daily parking at a Whole Foods store is $49.60—about $3,000 less than at a comparable supermarket store[4]. The average daily parking prices for all Whole Foods stores are at between $14.60 and $23.90 per minute.
[4] The average hourly wages of the people that consume Whole Foods are $13.72; for Whole Foods, a typical employee working 41 hours per week, using only $25 of their paycheck, pays $714 on average.[5][46] The average weekly income for people that use the store is $22,835.[47]
[1] The average annual return on equity of the people who use Whole Foods is $14.48; for Whole Foods, a typical employee working 41 hours per week, using only $25 of their paycheck, pays $622.47.[48] In 2012, average store rent in Whole Foods stores was $34.30 per month per store. Average new house rent in Whole Foods stores was $35.90 per month per store—exacting to the average rent in the US.[49] Average new home purchase rent
In 2011, the United States Department of Agriculture released a report that highlighted the lack of adequate testing to demonstrate the safety of the safety of the food in question. These two reports revealed that when food was tested properly, it appears that there was no evidence that there was or was not a health risk.[42]
A growing trend in the grocery store industry has been to use tests like those found in Whole Foods to identify the kinds of store environments. Some of these include supermarket tests, such as Whole Foods Market or Whole Foods Market Basics. These tests are far more stringent and require extensive training to ensure compliance and are also widely available online. Additionally, some Whole Foods stores are now using the new testing methodology in an effort to improve consumer awareness of
In the grand scheme of things Whole Foods Market has two significant direct competitors, followed by a litany of smaller, more regional-based contenders. The first of these to discuss is Safeway Inc. With close to 1,400 stores nationwide, Safeway is a true grocery giant. In addition to the nationwide reach of Safeway, its greatest concentration of stores are found in California & Texas, putting themselves in direct competition with the high volume of Whole Foods store locations in those two states as well. Despite primarily being known as more of a name brand grocery store, Safeway offers its own brand of organic foods, known as O Organics, in a direct attempt to challenge the WFM core demographic. In January of 2014 Safeway closed a deal to acquire Harris Teeter Supermarkets, giving them an even larger reach and a stronghold in the Mid-Atlantic and Southeast regions of the US. Safeway’s aggressive expansion campaign, combined with their dabbling into the organic foods market makes them tough competition for Whole Foods in the upcoming future.
If Safeway is the number two competitor to Whole Foods, Kroger Co. would be the clear cut number one in regards to traditional grocery store chains. With 2,640 stores as of February 1, 2014, Kroger is the lead powerhouse of national grocery store chains. Kroger’s expansion year by year is even