Whole Foods Market, Inc.

: Phase 1

MKTG S1 Piscitello

September 18, 2017

Team 21: Dream Team

Danni Coen

Madeline ONeil

Eric Butler

Sarah Tennyson

Karla Dabdoub
This report depicts the industry and its competitors. This overview will detail the company and

industry overview, company challenges, SWOTT analysis, competitive analysis, and target

markets.

Company and Industry Overview

Whole Foods Market is a publicly traded company who is classified as a grocery store in the

health food store industry. Their main headquarters is in downtown Austin and they were

founded on September 20th in 1980 by John Mackey and Renee Lawson. They are currently the

worlds leader in natural and organic foods, with over 470 locations in North America and the

United Kingdom. They are currently generating revenue of over $16.1 billion dollars and they

have over 58,000 employees worldwide (Whole Foods, 2017). Their main core values include

selling the highest quality natural and organic products available, satisfying and nourishing their

customers, serving and supporting local and global communities, and providing a platform for

sustainable eating and promoting health eating education. They believe quality is a state of mind

and they aim to set the standards of excellence for food retailers.

Company Challenges

Whole Foods faces three challenges in their industry: competition, acquiring new customers and

brand differentiation. While the organic food industry is expanding, it results in more

competition, which has caused stock prices to drop across the organic food industry as a whole.

Another challenge is expanding Whole Foods target market to reach a wider range of consumers

(Amazon Prime members, millennials, and the frugal). Thus, this will help hit the target revenue,

which will hopefully increase their stock price. Further, their main problem is brand

differentiation because with the industry boom, Whole Foods is not unique anymore. Their
competitors are providing the same brand style with cheaper prices which has hurt Whole F oods

sales.

SWOTT Analysis

Our SWOTT analysis (found in Figure 1) outlines Whole Foods Markets strengths, weaknesses,

opportunities, threats, and trends. Their strengths revolve around having a strong brand

recognition committed to selling fresh foods that are wholesome and safe to eat by restricting the

selling of products with harmful ingredients (Whole Foods, 2017). With providing high quality

foods comes the consequences of high prices in comparison to its competitors. However, the

concept of being Whole Foods, whole paycheck has begun to shift with Amazons recent

acquisition, lowering prices by 43% since merely the first day (Bloomberg Technology, 2017).

This acquisition is providing the opportunity of gathering data to adapt to customers shopping

habits and provide a better shopping experience as an advantage over its competitors. With

current trends surrounding the idea of having a fit and healthy lifestyle, Whole Foods provides

the resources available to satisfy these organic needs. This SWOTT analysis provides us the

opportunity to view the companys strong factors and how we utilize them to our advantage,

while being able to view the areas in need of improvement.

Competitive Analysis

Companies such as Kroger and Albertsons dominate in the industry of grocery stores and

supermarkets. Kroger has the largest market share of the industry at 16% while Albertsons has

9.8% (IBISWorld, 2017). Whole Foods has a market share of 2.7% (IBISWorld, 2017). Kroger is

the largest and most established chain of grocery stores in the United States. While their stores

are not entirely organic, they do offer organic options making them a direct competitor of Whole
Foods. Whole Foods unique selling position is their focus on selling high quality foods to

consumers. Their website states, We sell the highest quality natural and organic products

available,(Whole Foods, 2017).

Target Market Analysis

Whole Foods primary target market focuses on consumers who are focused on environmental

sustainability. The primary market is men and women who are 35 to 55 years old and 37% are

Asian (InfoScout, 2015). The consumers have a college degree or above and represent the upper

middle class with income exceeding $80,000 annually. The secondary target market is the health

conscious upper class. This target market is more focused on consuming healthy foods in their

diet following the organic trend (Bastain, 2014). This market focuses on 25 to 40 year olds who

are recent college graduates. The target income level is $50,000 and up. The secondary target

market is more likely to shop at Whole Foods for specific products rather than an all-

encompassing shopping trip. The tertiary market is consisted of consumers who care about both

sustainability and being health conscious (Bastain, 2014). This market is consisted of college

aged kids or recent graduates who are aged 18 to 24 years old. These consumers are usually

supported by their parents or make less than $50,000 annually (Bastain, 2014). This is also

considered an emerging market for Whole Foods because with Amazons recent acquisition the

prices are going to drop, which would appeal to the younger, less-affluent generation.

Summary

This overview detailed the company and industry overview, company challenges, SWOTT

analysis, competitive analysis, and target markets. Whole Foods has marketing challenges, but

with their USP it will differentiate them from their competitors. Overall, with the recent
acquisition, Whole Foods has opportunities to grow in marketing strategies through Amazons

Prime membership and price drops on products.

 Attachments
Figure 1
Strengths Weaknesses
Authentic shopping experience as a true organic Known as the "whole Paycheck" because of the
grocier high priced items
High quality standards that support health and Have lost some Generation X and baby-boomer
well-being shoppers over past five years
Strong brand reputation Is not considered to be the "one stop shop"
Create more retail jobs experience

Opportunities Threats
Acquisition from Amazon reduced prices by 43% on Competitors such as Kroger Co, Cosco Wholesale
first day Corp., and Albertsons/ Safeway
More online shopping since 29% of online food and Global warming has the ability to alter or reduce
beverage sales are natual and organic foods the production of certain foods
Significant overlap between Whole Foods shoppers
and Prime customers
Data gathering will allow to adapt to customers
shopping habits and provide a better online
shopping experience

Trends
Higher recognition for wanting to be healthy and fit
Higher demand for organic food
Online shopping
 References
Bastain, A. (2014). Whole Foods' Target Market . Retrieved September 17, 2017, from
https://storify.com/abastian/whole-foods-target-market

Bloomberg. (n.d.). Market share of U.S. food and beverage purchases in 2016, by
company*. In Statista - The Statistics Portal. Retrieved September 17, 2017, from
https://www-statista-com.ezproxy2.library.arizona.edu/statistics/240481/food-market-
share-of-the-leading-food-retailers-of-north-america/.

Boyle, M., Kaplan, J. (28 August, 2017). Amazon Cuts Whole Foods Prices as Much as 43% on
First Day. BloombergTechonology. Retrieved September 17, 2017, from
https://www.bloomberg.com/news/articles/2017-08-28/amazon-cuts-prices-at-whole-
foods-as-much-as-50-on-first-day.

Hurley, M.. (2017). IBISWorld Industry Report 44511. Supermarkets and Grocery Stores
in the US. Retrieved September 15, 2017 from IBISWorld database.

Whole Foods Market. (n.d.). Retrieved September 17, 2017, from

http://www.wholefoodsmarket.com/

Whole Foods Shopper Insights and Demographics. (2015). Retrieved September 17, 2017, from
http://infoscout.co/retailer/whole_foods