Whole Foods Market is the world's #1 natural foods grocery store chain. The company operates more than 460 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.
The company operates 466 stores natural and organic foods supermarkets. Some of its subsidiaries are Allegro Coffee Company, Bowie Strategic Investments, Inc., Fresh & Wild Holding Limited, Fresh & Wild Limited, and Mrs. Gooch’s Natural Food Markets, Inc.
With 21 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.
Sales and Marketing
Whole Foods spends much less on advertising and marketing than rival supermarket operators. Indeed, in fiscal 2016 (ends September) it spent about $96 million on ads and marketing, up from about $89 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 2016.
Whole Foods has seen its net revenues rise over the last five years.
In fiscal 2016, net revenue was $15.72 billion, up 2% on 2015 due to an improvement in basket size over the prior fiscal year.
Whole Foods' net income decreased by 5% to $507 million in fiscal 2015 due to the presence of interest expense primarily related to the company’s $1 billion offering of 5.2% senior notes.
In 2016 cash from operating activities was $1.11 billion, down 1%, due to the changes in prepaid expenses and other current assets; and accrued payroll, bonus, and other team member benefits.
Key elements of the company's growth strategy are the opening of new stores, acquisitions, and increasing same-store sales. In FY2016, the company opened 28 new stores. 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." In fiscal 2016, the company launched the value store format 365 by Whole Foods Market. 365 complements the Whole Foods Market brand, allowing the company to address the value-quality proposition through a convenient, smaller footprint, and curated product selection.
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.