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Whole Food Market, Inc

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Whole Food Market, Inc
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To: John Mackey & Walter Robb From: Subject: Executive Summary: Whole Foods Competitive Position Analysis Industry Analysis As the largest grocery chain of natural and organic foods in the United States, Whole Foods Markets competes within a specialized segment of the $557 billion (FMI, 2009) overall grocery retail industry. Its main competitors sit within various strategic groups encompassing specialized organic/natural food retailers, traditional grocers (especially those with dedicated organic food offerings), mass‐ merchandisers such as Wal‐Mart who have launched organic food lines, and even local co‐op markets or farmer markets. However, Whole Foods enjoys an enviable competitive position in this industry due to its scale and expansion, mission‐driven brand superiority, and premium shopping experience. In evaluating the industry, the environmental factors that are most important are market size, demographic trends, regulatory factors, technology developments, supplier channels, as well as consumer habits and social considerations (Exhibit 1). The effect of these factors are dramatically much more favorable for the natural/organic food retail industry than the overall grocery industry, due to greater market growth and increased consumer adoption due to perceived health and wellness benefits coupled with an affluent customer base willing to pay a price premium. The only adverse factor, the higher levels of regulation impacting the organic food segment, is counterbalanced by the ability of the segment to withstand more stringent food quality and safety regulations in the future. As Whole Foods is just 1.3% (Riddick, 2011) of the overall food retail market, it is well‐positioned to capitalize on these attractive industry fundamentals for natural and organic foods. A Porter’s Five Forces analysis (Exhibit 2) further


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