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Whole Foods Market Global Expansion Essay

1071 words - 4 pages

The strategy of WFM, co founder Mackey, is to continue offering healthier options for its customers. The movement into Canada and the UK in the last few years, lays the footprint for additional global expansion. Mackey intends to increase WFM to 1000 stores. The question is whether it will happen through acquisitions or new store locations. The answer based on their history is a combination of both. The store in Canada opened in 2002. Since brand recognition is not as strong, the store struggled somewhat in the beginning; however, the expectation is that it will grow to one billion in the next ten years (Patton, 2013). The stores in UK, which are in the greater London area, have received mixed receptions, and some stores are selling well while other locations are not. However, Mackey is not deterred and believes that longevity will produce the desired results.
Mackey acknowledges that Trader Joes is probably their most aggressive competitor, especially since some perceive their pricing to be lower. Conversely, WFM has answered back with its own price strategy developing a store brand organic line, 365 Foods. With the number of consumers demanding organic increasing over the years, major grocery chains like Kroger have added organic and specialty food choices to capture some of WFM customers. So have other stores like Wal-Mart and Meijer. However, ask any WFM loyalist and they will tell you that the product offering in these stores cannot stand up to the standards they are accustomed to. However, other holistic competitors such as Sprouts Farmers Market and The Fresh Market are showing that they are serious competitors as they cautiously add stores. Also, WFM stocks did not do as well as stockholders anticipated (Competitive Analysis of Whole Foods, Inc., 2010). This is because the comp-sales were lower than expected and the corporate forecasts dropped minor percentage points as well.
Mackey’s partner and co-CEO Robb notes food pricing as the main barrier between WFM and other large retailers. However, over the years this has become less of an issue as their marketing efforts have been directed towards price competitiveness. While pricing for some may be an issue, quality is not. WFM does not have a standalone competitor that equals their product quality or line of products sold. WFM is the Audi or Mercedes Benz of food. The consumers that shop at Wal-Mart are probably not the same ones who shop at WFM. Colvin’s in his Fortune Magazine article asks WFM CEO Robb if their customer is “Someone with a graduate degree, driving a Prius, with the radio on NPR. Accurate or off-base?” (Colvin, 2013). Robb answers affirming this is true, but that he expects their customer based to expand beyond this. However, affluent consumers are a significant part of the WFM customer base.
Quality the Foundation of WFM
The founder, now billionaire Mackey built his empire on the ethics of quality. This objective to promote excellence and non-conformity is the...

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