Whole Foods Market's Growth Strategies and Future Prospects

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Case Details:

Case Code : BSTR244
Case Length : 22 Pages
Period : 1978-2006
Pub Date : 2007
Teaching Note : Available
Organization : Whole Foods Market
Industry : Retail
Themes: Growth Strategy
Countries : The US

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Whole Foods Buys Wind Energy Contd...

"All of those things we do related to our core values help drive sales, help convince a customer to drive past three or four other supermarkets on the way to Whole Foods,"said Michael Besancon, a Regional President at WFM.8

Wind energy was one of the fastest growing sources of energy in the US in the early 2000s, and WFM's shift to renewable sources was expected to encourage other companies to follow suit. Kurt Johnson, the head of the US Environment Protection Agency's (EPA) Green Power Partnership said, "In the corporate world, this is huge. When a market leader does something like this, others will emulate."9 According to the EPA, the second and third largest consumers of wind energy in the US as of early 2006, were the US Air Force (312,416 megawatt-hours), and consumer and healthcare products major Johnson & Johnson (241,398 megawatt-hours).


The history of WFM goes back to 1978, when John Mackey (Mackey), a college dropout from Texas, and his friend Renee Lawson Hardy (Hardy), started an organic foods store in Austin, Texas. The store was called Safer Way Natural Foods (after Safeway Inc.10), and the partners opened it with a capital of $45,00011 borrowed from their friends and families.

Safer Way was a 3,000 square foot store, which primarily sold organic food and groceries. The store also contained a small restaurant. The store and the restaurant were strictly vegetarian, and the partners sourced their supplies from local communities.

This was around the time when consumers had started becoming concerned about the use of chemicals and additives in food products, and it wasn't long before Safer Way had found a loyal clientele. But Mackey and his partner had had no business training, and found it difficult to run the business. By the end of the first year, the store had lost $23,000.

Excerpts >>

8] Steve Quinn, "Whole Foods Commits to Wind Energy,"ABC News Money, January 10, 2006, http://abcnews.go.com

9] Bruce Horovitz, "Whole Foods Goes with the Wind,"USA Today, January 9, 2006.

10] Safeway Inc. was a major food and drugs retailer in the US. As of December 31, 2005, the company operated 1,775 stores in the United States and Canada, and had revenues of $38.4 billion.

11] Dollars ($) refers to US dollars in this case study.


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