Whole Food

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Industry Analysis

Dominant Industry Characteristics

Since going public in 1991, Whole Foods has focused on acquiring other small owner-managed natural and organic food stores as well as opening new stores of their own. However in 2002-2006, they decided that instead of making acquisitions, Whole Foods growth strategy would be based on opening new stores. Whole Foods chooses upscale, urban metropolitan areas to place their stores. These locations are high traffic shopping locations, some are freestanding, some are in strip centers, and some are in high-density mixed-use projects. By the end of 1991 fiscal year Whole Foods had 10 stores and by the end of 2007 they had 276 stores. By 2008, Whole Foods had stores in 36 states.

The most important industry characteristic would be the market size and growth rate. "The combined sales of foods and beverages labeled as 'natural' or organic - about 62 billion in 2007 - represented about 7.3 percent of the roughly 850 billion in total U.S. grocery store sales." 7.3 percent of 850 billion total grocery store sales seem like a small number for a large market but the market is still growing. "According to the Organic Consumers Association, sales of organic foods in the United States hit 17 billion in 2006, up 22 percent from 13.8 billion in 2005. When natural foods and beverages (defined narrowly as those with no artificial ingredients) were lumped in with organic foods and beverages, the U.S. retail sales total came to 28.2 billion in 2006, up from 23 billion in 2005." All this information is a brief explanation on the industry's position and the product life cycle. By 2008 organic foods and beverages were available in nearly every food category and were available in over 75 percent of U.S. grocery stores. These numbers show that industry is most certainly in rapid growth concerning sales. Offering organic and natural food at most grocery stores other than specialty stores also shows growth. "While only...
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