Company Strategy: Whole Foods on the Surface,

Company Strategy: Whole Foods

On the surface, Whole Foods has a unique, almost counterintuitive philosophy. Rather than stressing value and volume in terms of food sales, it instead offers more expensive organic and specialty goods. However, its niche marketing strategy has proven to be extremely lucrative. Whole Foods is an interesting case study as a company in the manner in which it has simultaneously capitalized upon popular trends in food without trying to be 'all things to all people.' In 2013, the company had same-store sales growth of 7.5%. It has rapidly expanded: "the company's growth strategy is to seek new locations for its stores in highly populated, often urban, areas. Each store averages around 38,000 square feet, and about 30% of the company's stores were acquired, meaning that they were other health-food stores that were bought out and re-branded as Whole Foods" (Frankel 2013).

Whole Foods' vision and mission statement affirms its commitment to organic produce, sustainable practices (including recycling) and minimizing waste. Its website proclaims: "We believe that companies, like individuals, must assume their share of responsibility as tenants of Planet Earth" (Our mission and culture, 2013, Whole Foods). It has also pledged to support community organizations such as food banks and contributes 5% of its total net profits to not-for-profit organizations (Our mission and culture, 2013, Whole Foods). The company boasts of the generous benefits it offers employees and a team-based approach which awards collective displays of excellence. Quality and respect for employees, according to Whole Foods, is in keeping with its vision.

Whole Food has clearly defined standards for all of the foods that it sells that are very different from the average retailer. Not only is all of its food organic; it also only sells cruelty-free meat, and dairy and sustainable seafood. It has a long list of artificial substances like aspartame and BPAs which are banned from its shelves, and will not stock a product that contains them, even if the product is popular. Once again, this may sound counterintuitive to making a profit, but this is keeping with Whole Foods' desire to protect its brand.

If Whole Foods does not show integrity, there is no reason for consumers to pay premium prices to shop at the store. Many stores are cheaper than Whole Foods (one reason it is nicknamed 'Whole Paycheck') and more stores (including Wal-Mart) are carrying organic items. However, its extensive gourmet, organic prepared items combined with the belief that all of the products on the shelves are 'good for you' has enabled it to remain solvent, even when it was hard-hit during the recent recession. During the recession, Whole Foods was forced to cut back on some of its prices, although this is difficult for the retailer, given the high input costs of sustainable food. By marketing to more affluent, health-conscious consumers, Whole Foods has managed to stay afloat. "Whole Foods not only survived the recession but they've thrived on it…They were able to clearly iterate their value proposition to the middle class consumer at a time when every spent dollar began to mean something again. They ramped up their own house brand offering more SKUs than ever (which kept margins high) and cut some of the more egregious prices in the store to hang on to loyal customers" (Brown 201). Whole Foods' store-brand offerings for the middle class and a base of high-income consumers less affected by economic downswings have proven to be an effective way to continue to grow while other food retailers flounder.