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COMPANY PROFILE

Whole Foods Market Inc

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Whole Foods Market Inc TABLE OF CONTENTS

Whole Foods Market Inc © MarketLine

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TABLE OF CONTENTS

Company Overview ………………………………………………………………………………………….. 3 Key Facts …………………………………………………………………………………………………………. 3 SWOT Analysis ………………………………………………………………………………………………… 4

Whole Foods Market Inc Company Overview

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Company Overview

COMPANY OVERVIEW

Whole Foods Market Inc (Whole Foods Market), a subsidiary of Amazon.com Inc, is a natural and organic foods supermarket chain. The company's product portfolio comprises packaged goods, bulk, frozen, dairy, meat, bakery, prepared foods, coffee, tea, beer, wine, cheese, nutritional supplements, vitamins, body care, pet foods, and household goods. Whole Foods Market offers a variety of natural and organic products including non-GMO, vegan, gluten-free, dairy-free and other special diet foods under the brands such as Whole Foods Market, 365 Everyday Value and Whole Trade. It also sells its products through online and mobile apps. The company has store operations in the US, Canada and the UK. Whole Foods Market is headquartered in Austin, Texas, the US.

Key Facts

KEY FACTS

Head Office Whole Foods Market Inc 550 Bowie Street Austin Texas Austin Texas USA

Phone 1 512 4774455 Fax 1 512 4827000 Web Address www.wholefoodsmarket.com Revenue / turnover (USD) Financial Year End Employees 105,000 Ticker

Whole Foods Market Inc SWOT Analysis

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SWOT Analysis

SWOT ANALYSIS

Whole Foods Market Inc (Whole Foods Market) is a natural and organic foods supermarket chain. Store network, synergy with parent company, and focus on quality are the company's major strengths, even as weak international presence and product recalls remains causes for concern. Positive outlook for e-retail industry in the US, food and grocery retail industry in North America, and store expansions are likely to offer growth opportunities to the company. However, labor wages in the US, intense competition and stringent regulations could affect its business operations.

Strength

Store Network Synergy with Parent Company Focus on Quality

Weakness

Product Recalls Weak International Presence

Opportunity

Food and Grocery Retail Market in North America Positive Outlook for E-Retail Industry in the US Store Expansions

Threat

Intense Competition Stringent Regulations Labor Wages in the US

Strength

Store Network

The company sells its products through physical and online stores and mobile application. It operates 526 stores including 505 in the US, 14 in Canada and seven in the UK. The company conducts its store operations through offices in Massachusetts, Maryland, New Jersey, Florida, Georgia, Illinois, Texas, Colorado, Washington, and California, the US. It also operates through offices in the UK and Canada. Whole Foods Market has produced and floral procurement offices in California, the US and London, the UK. It owns and operates seafood processing and distribution facilities, and specialty coffee and tea procurement and roasting centers.

Synergy with Parent Company

As a part of Amazon.com Inc (Amazon), the company gains significant operational advantages. Amazon offers apparels, auto and industrial items, beauty and health products, electronics, grocery, books, games, jewelry, kids and baby products, movies, music, sports goods, toys, tools and other related products. Amazon has a strong brand identity in the global markets and is a leader in online retail market. With about 1,271,000 employees in more than 30 countries, Amazon sells its products and services both online and physical stores. It has been delivering the solutions suitable to customer needs leveraging latest technologies across its processes, providing enhanced customer service. Whole Foods Market benefits considerably from the operational, distributional and technological expertise of its parent

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company. The company also benefits through synergy with the parent company in the fields of online marketing, product placement, business strategies and inventory management.

Focus on Quality

Whole Foods Market focuses on quality management in both product manufacturing and business processes. The company purchases and sells food products that meet Government’s organic standards. It purchases products from wholesale suppliers that meet their product quality standards. Whole Foods Market being a USDA-certified organic national grocer sells organic and natural products.

Weakness

Product Recalls

Product recalls create a negative impact on the company’s brand image and may also result in decease in customers’ confidence on the company and effect its growth. The company recalled some of its products in the past. In March 2021, the company recalled Cranberry Biscotti at 6 Whole Foods stores due to undeclared allergens. In December 2020, FDA issued a warning to Whole Foods after the company voluntarily recalled more than 30 products over a 13-month period from October 2019 to November 2020. In July 2020, the company recalled Whole Foods Market Spinach Artichoke Dip.

Weak International Presence

Whole Foods Market has operations across the US, Canada and the UK, generating majority of its revenues from the US. Whole Foods Market has limited presence in the UK and Canada. In a competitive environment, high dependence on few markets not only exposes Whole Foods Market to the vulnerability of local market conditions but also limits the growth opportunities. Besides, the company is deprived of the economies of scale and benefits which its competitors realize because of their global operations.

Opportunity

Food and Grocery Retail Market in North America

The company stands to benefit from the positive outlook for the food and grocery retail market in North America. According to in-house research, the food and grocery retail industry in North America is forecast to reach US$2,986,097.6 million by 2023. The US accounts for 87.1% of the retail market value, followed by Mexico with 7.8% and Canada with 5.1% during 2023. Food is the largest segment of the market in North America, accounting for 71.3% of the value, followed by drinks (21.9%), tobacco (5%), and household products (1.8%). Hypermarkets, supermarkets and hard discounters accounted for 65.4% of the food and grocery retail industry in North America, followed by Convenience stores and gas stations with 13.5%, cash and carry and warehouse clubs with (3.5%), value, discount and general merchandise retail with 3.2%, and other with (14.5%).

Positive Outlook for E-Retail Industry in the US

Whole Foods Market Inc SWOT Analysis

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Whole Foods Markets sells its products through online stores. The company stands to benefit from the growing online retailing in the US, which provides consumers the convenience of shopping from home. With the increase in interactive methods and limitless content, the retail e-commerce is growing at a faster rate. According to in-house research, online retail sector in the US is forecast to reach US$636.1 billion by 2023 from US$368.5 billion. Online Pureplay form the leading distribution channel in the United States online retail sector, accounting for a 53.3% share of the total sector's value, while Multi-Channel Retail accounts for a further 46.7% of the sector. The US accounts for about 30.9% of the global online retail sector value. The retailing of electrical and electronic goods was the largest segment in the sector in 2018, which accounted for 32.7% of the total value, followed by apparel retail (21.2%), home and garden products (16%), food and grocery retail (8.7%), furniture and floor coverings (7.1%), footwear (4.1%) and other category accounted for 10.2% of the value.

Store Expansions

The company’s focus on new store openings increases its customer reach and sales. In July 2021, the company opened its new store in Tampa, Florida, the US. In June 2021, the company announced to open new store in Portsmouth, England, the UK. In the same month, the company announced to open new store in Tampa, Florida, the US. In May 2021, the company announced its plan to open 43 stores within California. In March 2021, the company announced to extend its wholesale grocery distribution partnership with United Natural Foods. In February 2021, the company opened a new store in Boulder, Colorado, the US. In October 2020, the company opened a new store at 14311 Ventura Blvd. in Sherman Oaks, California, the US. In July 2020, the company opened a new store in Washington, D.C. This store provides local products, variety of organic and natural grocery items and plant-based fast-casual concept. In the same month, the company opened a new store in Manhattan.

Threat

Intense Competition

Whole Foods Market operates in a highly competitive retail market. The factors that determine the level of competition within the industry include service performance, price, and sales and distribution capabilities. Whole Foods Market faces competition from Albertsons Companies Inc, Asda Stores, Costco Wholesale Corp, Marlow Foods Ltd, Publix Super Markets Inc, The Kroger Co, Winn-Dixie Stores Inc, Walmart Inc, Trader Joe's Co and Weis Markets Inc. Apart from established players in developed countries, players from emerging countries are also competing hard to garner greater market share. Many of its competitors have a longer operating history, greater brand recognition, established customer and supplier relationships, and greater financial resources, which could lead to the creation of innovative products and business expansion through acquisitions.

Stringent Regulations

As Whole Foods Market operates in the natural and organic foods market, its stores and products are subjected to various laws and regulations. Whole Foods Market is required to comply with provisions regulating health and sanitation standards, food labeling, equal employment, minimum wages, and

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licensing for the sale of food and, in some stores for sale of alcoholic beverages. It is subjected to laws and regulations related to various federal agencies and departments, including the US Food and Drug Administration (FDA), Federal Trade Commission (FTC), the Consumer Product Safety Commission (CPSC), United States Department of Agriculture (USDA) and the Environmental Protection Agency (EPA). Failure to comply with these standards could result in penalties and seizure of marketing and sales licenses, which would result in additional compliance costs and effecting the company’s financial position.

Labor Wages in the US

Increasing manpower costs could have an adverse effect on the company’s margins. The tight labor markets, government mandated increases in minimum wages and a higher proportion of full-time employees could result in an increase in labor costs. The federal minimum Labor costs are rising significantly in the US. The federal minimum wage provisions are contained in the Fair Labor Standards Act (FLSA). As of January 2021, the minimum wage rate in the US remained at US$7.25 per hour. The 29 states and the District of Columbia have higher minimum wages than the federal wages. These wages range from US$13.69 per hour in Washington, US$12.32 per hour in Colorado, US$12.15 per hour in Arizona, US$11.75 per hour in Maryland, US$11 per hour in Arkansas, US$10.50 per hour in New Mexico, and US$9,25 per hour in Delaware. The minimum wage reached US$13 per hour in California.

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