finding a small size Wild Oats store that has a low contribution margin and sell it as soon aspossible. The larger store size will impact to a higher direct store expense, which can reducethe store contribution margin. So, Whole Foods can use the strategy to reduce the averagestore size, in order to increase the store contribution ‐profit margin.Another strategy to grow the company is to increase sales by increasing the quantity to sell.They have to continue increasing the size of their store across the country based on their storesize standard. By increasing the size, they might increase their sales.Based on the financial statements, the company do their financing mostly from debt,especially when they did the acquisition of Wild Oats. The company should minimize the18
debt and use equity financing for their investment, in order to bring back the companyfinancial health. The healthier company will attract more investor.CRAFTING AND EXECUTING STRATEGIES1.Whole Foods’ management decided to drive growth by opening 10 to 15 decidedlybigger stores in metropolitan each year – stores that ranged from 40,000 square feet toas much as 70,000 square feet and were on the same scale or even larger than thestandard supermarkets operated b Kroger, Safeway, Publix and other chains.ActionThe averages of Whole Store’s stores opened were 16 stores/year. The biggest isthe acquisition of Wild Oats in late August 2007.2.Whole Food’s stores had an open format and generated average annual sales of about$32 million. ActionThe company relocate some of the smaller stores to larger sites with improvedvisibility and parking. They have 45,000-60,000 square feet, the biggest was a 99,800-square-foot storein London. Whole Foods prefer store locations in the upscale areas of urban metropolitancenters, frequently on premier real estate sites, high-traffic shopping locations, The average annual sales only achieve $22 million based on the calculationswhich the data taken from Exhibit 5.3.Regarding their commitment to customer, Whole Foods sell foods that met strictstandards and that were of high quality in terms of nutrition, freshness, appearance,and taste. They guaranteed 100 percent satisfaction on all items.Action19
The company maintained a list of ingredient that unacceptable in food products.Meat and poultry products are natural, minimal processing, and raised without theuse of artificial growth hormones, antibiotics or animal by-product in their feed.Seafood product is wild caught or sourced from aquaculture farms whereenvironmental concerns are a priority.They offered premium products, so that they charged customers with thepremium price.4.The driving concept of Whole Food’s merchandising strategy was to create aninviting and interactive store atmosphere that turned shopping for food into a fun,pleasurable experience.
- Fall '13
- Whole Foods Market