Essay about Whole Foods

Submitted By Frank-Gj
Words: 897
Pages: 4

For Years, Whole Foods has been growing extremely fast, opening up new store after another. According to wallstreet, just in 2013 alone, there have been openings of thirty-two stores in ten markets. Whole Foods owe its success to the organic food craze, which has allowed the company to charge premium prices for its produts, compared tp the conventional producrs.
Wall Street has been monitoring this company chasing after its stock, which went from high to low. Wall Street notices that Whole Foods Revenues are flattening, Net income is plummeting, consumer confidence and buying power is shrinking and debt/equity ratio is unfavorable. The cause of this problem is that you as a comapny dont own the organic farms that produce the prodcuts that you sell at your own stores but you buy it from others. And so the scores of your competitors, who now claim a piece of the organic food market. In more simple words, your competition has caught up with your market on both fronts, the resource market where you guys buy organic food and the commodity market where you guys sell it. that is just one of the
Whole Food's problems. The other problem which in my opinion is a more serious one is that the company is running out of affluent neighborhoods to sell its produce in, which makes the competition pricing pressures worse. The end result of this is a slow down in the companys sales growth and narrowing profit margins.
You guys are discovering the hard way that not all consumers are equal in terms of income, even if they have the same preferences, and the prices do matter also even for organic foods, when income is not there. The solution to this is very simple, you guys should take a lesson or two from Startbucks which faced similar problems a while ago. Some sugesstions are close unprofitable stores and focus more on innovation reather than pricing.
In order for your company to succeed under challenging financial conditions you must take immediate action to increase financial perfomance and maintain your competitiveness. We all know that the most expensive area in the cost structure is the labor cost. whole Foods needs to reevaluate which services are highly valued in the store, such as well-trained customers service representatives, and which ones add less value. For example, the full-service bakeries in the stores can be changed to self-service without deeply dissatisfyin customers. Cuttin the expenses that are not necessary to the exceptional in-store experience will make available more resources that you as a company can use to bring value back to customers and shareholders.
You as a company havent put a lot of effort on advertising and marketing compared to other supermarkets. Instead you have only relied on word-of mouth recommendations and testimonials from shoppers. Your stores spend most of their marketing budgets on in-store marketing-related activities, including promotional signs and events such as taste fairs, tours and product samplings. You are doing a very great job on creating an exceptiona; in-store experience for customers but it is very important to not forget that it should be a priority to first draw customers in, especially in a time that many shoppers do not think they can afford to shop at
Whole Foods. You guys should be careful not to lessen your reputation of quality and unique mission by over-promoting price discounts, rather, emphasizing your value and benefits.
Your company must plan cerefully to mazimize slow and steady growth opportunities rather than

entering occupied markets and destroying your