SWOT Case Study - Whole Food

Company History

In 1980 twenty-five year old college dropout John Mackey and twenty-one year old Rene Lawson Hardy created the Whole Food Company (WFC) in Austin, Texas. It was born with the idea to provide a grocery store featuring good, wholesome food; not a "health food" store filled with pills and potions. Sales doubled each year for the first four years. This SWOT analysis is about Whole Foods.

Strengths

• Whole Foods Market (Whole Foods) owns and operates a chain of natural and organic foods supermarkets through several wholly-owned subsidiaries. The company's supermarkets are located in the US, Canada, and the UK. It employs about 52,900 people.
• In 1984, Whole Foods Market began its expansion out of Austin. While continuing to open new stores from the ground up, they fueled rapid growth by acquiring other natural foods chains throughout the 90's: Wellspring Grocery of North Carolina, Bread & Circus of Massachusetts and Rhode Island, Mrs. Gooch's Natural Foods Markets of Los Angeles, Bread of Life of Northern California, Fresh Fields Markets on the East Coast and in the Midwest, Florida Bread of Life stores, Detroit area Merchant of Vino stores, and Nature's Heartland of Boston. In 2001, Whole Foods moved into Manhattan, generating a good deal of interest from the media and financial industries. 2002 saw an expansion into Canada and in 2004, Whole Foods Market entered the United Kingdom with the acquisition of seven Fresh & Wild stores.
• The company recorded revenues of $7,953.9 million during the financial year (FY) ended September 2008, an increase of 20.7% over FY2007.
• They have had 25 years of double digit revenue growth.
• They are the undisputed $4.7B Organic Supermarket Industry Leader.
• Originally, health food stores were small, expensive, and didn't carry a large variety of products, Whole Foods changed all of this and they became the founding firm of this industry.
• They offer catering , seasonal products and recipes, in-store events such as cooking classes, free tours around the store for customers with food allergies.
• • They have an amazing website with blogs, recipes, sale items, tips, podcasts and more. The website is well designed and explains the Whole Foods concept very well.
  • They are supported by complementary industries such as: Health Industry, Health Insurance Companies, Health Care Specialists, Fitness Centers and Wellness Programs.
  • Whole Foods has a commitment to selling high quality natural and organic products, satisfying and delighting its customers, and caring about their communities and environment. These three factors, in large part, are why customers are attracted to the brand.
  • They have a hip image and attract younger, more affluent shoppers.
  • Their reputation for having the largest selection of organic, healthy, locally grown foods of any supermarket worldwide makes them attractive to customers.

  Weaknesses

  • Right now the US government subsidizes (provides money to support) the corn growers industry, but not the organic farmer-therefore companies not utilizing organic ingredients can grow more food cheaper and faster.
  • The number of organic food farmers is growing, but slowly and the supply chain for organic foods is underdeveloped and cannot meet the needs of the American food system.
  • They are known as "whole paycheck" because some of the foods are higher priced than other grocery stores.

  Opportunities

  • The commitment to high quality natural and organic foods leads to higher prices than non organic and natural foods. As the world is becoming more aware of how important it is to eat healthy, Whole Foods need to be there to pull those consumers in to the stores. Many consumers have the misconception that healthy foods are more expensive then other foods, when in fact they do provide a store brand that is comparable in price to other grocery chains. Whole Foods needs to change the attitudes of those consumers.
  • During a time when the economy is in a downturn, Whole Foods has to find a cost effective way to give a little something back to customers that do buy on a regular basis and try to get new customers in the same tactic. Making a free rewards card--after so much bought or points accumulated a customer can get a discount on the next purchase or get something free from the store.
  • They could sponsor more town events (not just in-store events) to increase recognition of the brand name and make customers more aware of the products they offer.
  • They need to promote and build brand identity with organic foods, eventually leading to the idea that when people think "organic" they will think "Whole Foods."

  Threats

  • Whole Foods has increased competition from existing supermarkets that are re-branding in order to compete with them-Wal-Mart, HEB Central Market (Texas, Mexico) Wegman's (New York), and Publix (Southern US). These stores have copied the atmospherics and some of the food items sold by Whole Foods.
  • The economic situation in the US is a threat due to Americans' desire to save money and that means groceries. Food is expensive and Americans' don't see the cost effectiveness of purchasing organic food.
  • Any changes in government regulations on organic food would impact consumer spending even further.
  • by Mkt Teachers