Whole Foods Market was formed in the 1980 in Austin, Texas, in the USA by three businessmen by the names John Mackey, Lawson Hardy and Craig Weller and Mark Skiles. These businessmen felt that the natural foods industry still had a lot of opportunities and that is why they decided to open a natural foods supermarket given the fact that three were very few number of natural food supermarket in the USA then.
John Mackey and Renee Lawson who was John’s girlfriend borrowed $45,000 from friends and family, which they used to form Saferway in Austin Texas. Saferway was name from Safeway, which operated in Austin, Texas then.They then merged with Clarksville Natural Grocery two years later. Clarksville was owned by Craig Weller. The merger resulted in the formation of Whole Foods Market in 1980 September 20. The store space was 12,500 feet with staff of 19. In 1981, the flooding in Texas resulted in massive losses of about $400,000. The company had no insurance cover.
The community offered to voluntarily repair and clean the damage.The year 1984, witnessed the expansion of the company to Houston, Dallas and New Orleans. The expansion to New Orleans was through the purchase of whole food company. In 1989, the company opened a store in Palo Alto, California.The expansion was through new store openings and through acquisitions like Wellspring Grocery of North Carolina, Bread & Circus of Massachusetts and Rhode Island, Mrs. Goochs Natural Foods Markets of Los Angeles, Bread of Life of Northern California, Fresh Fields Markets on the East Coast and Midwest, Florida Bread of Life stores Detroit area merchant of Vino stores and Natures Heartland of Boston. All these acquisitions were done in the 1990s.
The company continued to grow and expand with the acquisition of Food for Thought in Northern California and Harry’s Farmers Market stores in Atlanta.The company expanded into Manhattan in 2001. In 2002, Whole Foods Market entered the Canadian market. 2004 saw the entry into the UK market with the acquisition of seven fresh and wild stores.Planning and budgetary concerns for the companyThe company’s operations and performance could be affected by the following planning and budgeting concerns. The planning includes the strategic while the budgeting concerns the planned utilization of resources.One of the biggest threats to the company’s financial and operation performance this year is going to be the challenges brought about by the increasing food prices.
The global food prices have been on an increasing trend and this could severely impact on the company’s earnings. Rise in food prices will lead to higher product prices, which could affect the sales. Significant increase/fluctuation in raw material prices could render the budgets irrelevant.The threat of existing and new entrants in the industry is also of concern to the company. The competition can lead to the company abandoning its expansion plans and concentrate in tying to consolidate its current market share that may be falling to competitors. In terms of budgeting the threat of competition may lead to changes in product pricing or expenditures in for example advertising.The expansion undertaken by the company may not provide the anticipated benefits in terms of increased market share.
Rather the new stores may eat into the already existing market share of the company such that the acquisition may not help in the overall strategies of the company.New store openings by the company may lead to higher operating costs that were not budgeted for. The profitability of new stores may not happen as expected and therefore lead to extra costs that were not anticipated. The profitability of these new stores may not be as planned and thus their overall contribution to the company may not be significant.Since the company operates in a very sensitive industry; the food industry, then, any harm caused by the company’s products may lead to the loss of the image of the company and even result in costly litigations that may severely affect the financial performance of the company.In its risk factors section of the annual report the management indicates that the expansion and growth of the company depend highly on the acquisitions and new store openings. This means that if the company does not open or acquire other companies then the planned growth prospects may not be achieved.
The company has undertaken its recent acquisitions and expansion using a combination of cash and debt. This has lead to the company having a huge debt in its books. Highly generated companies may not be attractive to investors and therefore the planned acquisition may not be successful. Also the funds for expansion may not be available.Rise in global commodity and product prices increases the cost of the company’s products. The availability of products with the required levels of standards may also pose a problem in the company. Since the company cannot compromise on the quality of products it offers, it has to source for high quantity products at high prices.
These high prices may be above the budgeted prices such that the plans may not be attainable.All the above discusses factors can affect the plans of the company. The plans are strategies that the company is aiming to prove in order to achieve its desired goals and objectives. Budgets on the other hand help the company keep track on the costs and revenues.
The budges should therefore be followed at all times in order to avoid any negative variance although unforeseen circumstances can make this hard to achieve.Main products of the companyThe company is very strict on the quality of product that it sells in its stores. The natural and organic foods form all of the products on offer at the company’s outlets. Natural and organic foods lack the additives, preservatives, colorings and sweetness. Consumers are keen on the effects that the products they consume have in their health.Apart from being natural or organic the products should be fresh, healthy and has undergone minimal processing. Such products will still have their pure taste and nutrients.
The company also buys its produce from the local community as long as it meets the quality standards demanded by the company. Sourcing products from the local community has potential benefits, which includes the fact that it enables the company to have access to fresh produce straight from the farm. The transportation costs and pollution are minimized by buying from local farmers. Environmental pollution is of great concern to any company in today’s world.The local community is empowered through the company acquiring its supplies from the local farmers. The company is also able to help the local farmers to diversify into a variety of crops.
The company also buys products form low income producers who meet the standards demanded by the company. This is done through the whole Trade programPrivate label products also form part of the company’s product list. The company’s bakery ensures that the consumers access the freshest of breads. The various types of breads on offer include European styled loaves, sandwich bread, pizza crust, cookies and desserts.
Cornbread, foccacia, bagels, croissants, pies and cakes are some of the other products on offer at the company’s bakery. Tiny trapeze provides the company with confectionaries.The eggs used in the bakery, kitchens, bake houses are from free lens. The company also offers catering menu services where customers order online and pick their orders at the company’s stores.In the specialty foods section the company offers quantity cheeses, olives, chocolates, specialty sweets among other products.
The coffees sold at the company’s stores are individually handpicked by Christy Thorns and Road master of Allegro Coffee Company. This process ensures high quality, great existing coffee. The coffee is then roasted into different flavors. Allegro coffee is sourced from all over the world through partnerships.
Included in the product list of the company are the flowers. The flowers sold by the company include fresh roses, lilies, orchids, hydrangeas and seasonal flowers e.g. fillips, peonies and sunflowers.
All these flowers meet the Organic, Veriflora, Whole Trade, Rainforest Alliance and Fair Trade certifications. The flowers are from wild farmers other parts of the country and the whole over.The company also sells hand made gift baskets. The gift baskets can also be custom made. The baskets are then filled with the various gourmet tastes and products.
Rechargeable gift cards are also available although not online or over the phone. The gift cards can be recharged in the USA or Canada with amounts ranging from $5 to $500.Whole foods Markets, inc.
grocery department has a variety of products, which are locally and internationally made. The consumers are also provided information on the various products available in the company’s stores.The meat and poultry department offers game, duck, sausages, low fat cuts, range grow turkey and natural chicken.
Consumers also receive custom cuts, cooking instructions (recipes) and personal recommendations.The company also has prepared foods department, which serves a variety of entrees, side dishes, soups rotisserie grilled products, sushi and sandwiches. These prepared foods are served in catering menus, which are available in selected stores.
The produce department stocks a variety of fresh fruits and vegetables. These fruits are hand arranged. The selection ranges from the common fruits like oranges and apples to seasonal unique and specialty vegetables like cippolini onions. Cactus pears fruits and displays of freshly cut fruits,The seasonal section stocks a wide variety of sea products. The company is able to stock a fresh variety by controlling the whole process of seafood sourcing, processing and selling. The company also stocks a wide variety of teas in its stores ranging from white, green, Oolong and black teas.
Others include specialty, estate, flavored/scented chai, Russian, Suchong and lapsang sourchong, Pu’erh Gyokura and Kabasucha and Hoji-cha teas. Ice kind sweet teas are also stocked in the company’s stores. Herbal teas are also sold in the company’s stores.The company also stocks wide variety of wines.Overall strategy of the companyWhole Foods Market Company is a uniquely run business. The company is very selective on the products that it stocks and sells in its stores.
Every product must meet the stringent quantity standards set by the company. This is the reason why the company is leader in natural and organic food retail in the world.The whole foods aspect means that the company gets its product supplies locally and throughout the world. Their products should be of the highest quality, minimally processed and with no artificial preservatives hence maintaining their natural taste and flavors. The company believes that natural food is the most nutritious.
The products sold at the company’s stores have no sweetness, additives, colorings or preservatives.The empowerment of the staff so that they can make relevant decisions is also another aspect of the company’s motto. Employees are respected, treated equally therefore increasing their passion and motivation. The employees are a critical asset that will enable the company to achieve its objectives in terms of profitability and helping the community.