Whole Foods Market is the world's #1 natural foods grocery store chain. The company operates more than 430 stores throughout the US, Canada, and the UK. Whole Foods stores emphasize perishable and prepared products, which account for about two-thirds of sales. Most of the food and other items the stores sell are free of pesticides, preservatives, sweeteners, and cruelty. Whole Foods offers some 4,400 items in four lines of private-label products (such as the premium Whole Foods line). Founded in Austin, Texas, in 1980, Whole Foods pioneered the supermarket concept in natural and organic foods retailing.
With about 20 stores in Canada and the UK, Whole Foods rings up about 3% of its sales outside the US. After announcing plans to open hundreds more stores across Europe, international growth appears to have stalled, at least for now.
Sales and Marketing
Whole Foods spends much less on advertising and marketing than rival supermarket operators. Indeed, in fiscal 2015 (ends September) it spent about $89 million on ads and marketing, down from about $93 million the previous year. Instead, the grocery chain relies on word-of-mouth recommendations from its shoppers and marketing through social media such as Facebook, Twitter, Instagram and Google+. The company also markets its products through television, print, and digital advertising.
United Natural Foods is its single largest third-party supplier, accounting for 32% of Whole Foods total purchases in fiscal 2015.
Whole Foods reported revenue of more than $15 billion in fiscal 2015. That was an increase of 8% compared to the prior fiscal period. Its net income was $536 million in fiscal 2015, which was a decrease of 7% compared to fiscal 2014.
Key elements of the company's growth strategy are the opening of new stores, acquisitions, and increasing same-store sales. With the incursion of traditional grocery chains (Safeway and Kroger) and retail giant Wal-Mart into the natural and organic food space and fast-growing natural foods chains, such as Sprouts Farmers Market, adding stores, Whole Foods is facing a more mature and crowded retail market going forward.
The company has been looking towards technology spur growth. Whole Foods became the first national Instacart partner to offer both grocery delivery and in-store pickup in select US markets, and we was one of the first merchants to integrate with Apple Pay. Whole Foods is also working with New York-based Infor to build cloud-based software its executives hope will enable greater efficiency across its vast retail operations.
Whole Foods is working hard to emphasize its value proposition and shed its pricey image as "Whole Paycheck." The company is still committed to launching a smaller-store format, called 365 by Whole Foods, in 2016. The new stores will be in areas Whole Foods doesn’t currently serve, giving the company new customers and new revenue streams.
Responding to its health-conscious clientele, Whole Foods has pledged that by 2018 all products in its stores in North America must be labeled to indicate if they contain genetically modified organisms.