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Competitor Analysis

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Competitor analysis for Whole Foods Inc

Whole Foods’ Industry

Based on the provided article, it can be deduced that Whole Foods is known for provision

of its organic product lines by initially charging premium pricing for its goods. The company

operates in the US grocery industry which has historically been a low-growth industry, and has

maintained low margins due to fierce competition. The key segments included conventional

grocers such as Kroger, supercenters that include Wal-Mart and natural grocers such as Whole

Foods. It is important to note that Whole Foods directly competes within the organic foods’

industry with other market players such as Sprouts Farmers Market, and the Fresh Market. In

reference to the market share information for the US grocery market, there are many small

competitors who have been forced to close or been acquired. Even with the increased

competition, Whole Foods has still maintained a position as a market leader in the natural and

organic industry. The company retained a market leading position by implementing various

measures that seek to increase the rate of customer satisfaction. For instance, Whole Foods was

the only US retailer in the grocery industry that labeled genetically modified foods and also

published on its website a selection that ensures that consumers have an insight into the quality

of their food. Right from the time it was incorporated, Whole Foods established its position as

the leading retailer of natural and organic foods and therefore defined its mission in promoting

the vitality and well-being of all individuals through supplying the highest quality of wholesome

food. The company’s sole operating segment is its natural and organic markets with up to 97% of

its revenues being obtained from the US. Further, it is necessary to note that even with increased

competition in the segment, the biggest challenge facing Whole Foods has been the high prices

charged by the company.

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Analysis of Competitors to Whole Foods

As earlier noted, the biggest competitors to Whole Foods are other market players in the

natural and organic industry. Specifically, Sprouts Farmers Market is the largest rival to Whole

Foods as the company specializes in organic, natural products but offers lower price points. The

company has more than 300 stores and its market share increased from 3% to 16%. It is

important to note that Sprouts Farmers Markets has a competitive advantage linked to the

provision of full-service organic foods which has a dynamic range with a sustained focus on

providing nutritious, fresh, and healthy food.

Another significant competitor is Trader Joe’s which is a privately-owned natural grocer

that is a privately-owned natural grocer whose share market has been increasing consistently.

The company packages inexpensive natural as well as organic products and also provides

convenience store services. Further, Trader Joe’s has a well-developed distribution network with

more than 400 stores in the country, with a proper supply chain management which acquires the

right resources from many suppliers and then delivers them to customers within requested

timelines.

Also, Kroger is a notable competitor as it has an organic brand which compete directly

with Whole Foods. Kroger is recognized as the largest supermarket in terms of revenue and also

the largest retailer in the world which gives it a competitive advantage in terms of size and

number of sales. Because Kroger is a one-stop shopping store, its private label produces which

include organic products have contributed to an increase in the brand value and placed the

company in a strong brand position, hence Kroger remains one of the top competitors to Whole

Foods.
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Currently, for Whole Foods to leverage on its position as a market leader, there is a need to

determine whether to explore an uncharted territory and risk losing its reputation as a premium

brand, the company has traded at a substantial premium with a value that exceeds Kroger’s

market value, even though Kroger has a significant size advantage.