The grocery industry has produced increasingly high competition making it a low

The grocery industry has produced increasingly high

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grocers (Whole Foods), and wholesalers (Sam’s and Costco). The grocery industry has produced increasingly high competition, making it a low-growth industry at around 2-3% annually. However, Whole Foods has been able to keep a high growth rate since becoming a publicly traded company in 1992. Whole Foods may not be the biggest grocery store in the world, but they have done very well and maintain a position as the market leader for the natural and organic industry. They were forced to lower prices due to the heavy competition in the market. This caused for less revenue and less than expected growth, lowering the stock price by 20% on earnings release. This hit was significant but not enough to derail whole foods from the top stop for health junkies. Positives: Healthy lifestyles are becoming more popular with the age of social media and “influencers.” This is helping Whole Foods by enlarging their target demographic. Their healthy products are paired with premium prices and the trend to eat and live a healthier lifestyle has allowed them to continue charging more for their products. Exhibit 7.1 shows the consistent success that Whole Foods has maintained over the years and their ability to bounce back from a terrible recession. Adding stores was an interesting tactic but they did just that. From 2008 to 2013, they added 87 new stores across the country, and this helped them rebound after the recession. This expansion allowed Whole Foods to explore growth in many different areas of the market. Exhibit 7.4 shows this steady, post-recession growth that I’m talking about. From 2009 to 2013, when they were adding new stores, their EBITDA margins were steadily rising along with their sales growth. This reflects their nationwide reach after adding all of those new stores.

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