Whole Foods Case Analysis

Overview

Whole Food Markets was formed in 1980 with only 19 employees by John Mackey. John Mackey had a vision to support the health and well-being of people and the planet. Whole Food Markets offered organic foods to consumers in one location. Organic food was something that was not readily available at the time and the store capitalized on that. Within the next 11 years Whole Foods had 10 stores with revenues of $92.5 million. As of 2009 Whole Foods had 284 located in 3 different countries. With those 284 stores, they were selling $8 billion yearly while stores like Wal-Mart were selling over $125 billion per year. The mission statement of Whole Foods is wrapped up in the slogan “Whole Foods, Whole People, Whole Planet”. The company that John Mackey saw offered a way of life, not just groceries.

When Whole Foods came around in 1980 there were less than 6 organic grocery stores in the United States. In 2010 almost all stores offered something organic at their location and many food manufacturers were offering organic ingredients within their products. The success of Whole Foods and the education to the consumer brought organic food to the forefront of everyone's minds. Many farmers saw the opportunity to make more money by going organic. Even restaurants have moved to cooking with only organic products.

Whole Foods has stores that vary in size and selection of products available. The company uses an internally developed model to consider locations and sizes of stores based on the population, education, and many other aspects of the community. Using this model Whole Foods can determine not only where to develop a new store, but what items to sell within the stores. The main seller in all stores is fresh produce. The selection and variety usually outshines all other grocery retailers.

The pricing strategy that Whole Foods uses is “value-priced” prices. These prices are generally higher than traditional products sold by other grocers, but the cost of...