Case 1 Whole Foods Market in 2008: Vision, Core Values, and Strategy
hole Foods Market was founded in 1980 in Austin, Texas, when John Mackey, the current CEO, and two other local natural food groceries in Austin decided the natural foods industry was ready for a supermarket format. The original WFM opened with a staff of only 10. It was an immediate success. At that time, there were fewer than half a dozen natural foods supermarket in the US. By the 1991, the company had 10 stores, revenues of $92.5 million, and net income of $1.6 million. WFM became a public company in 1992, with its stock trading on the NASDAQ.
In 1997, when WFM developed the “Whole Foods, Whole People, Whole Planet” slogan, John Mackey, known as a go-getter with a “cowboy way of doing things”, said: “This slogan taps into perhaps the deepest purpose of WFM. It’s a purpose we seldom talk about because it seems pretentious, but a purpose nevertheless felt by many of our team members and by many of our customers (…)”
Since going public in 1991, WFM growth strategy had been to expand via a combination of opening its own new stores and acquiring small, owner-managed chains that had capable personnel and were located in desirable markets. But since the retailers of natural and organic food were mostly one-store operations and small, regional chains having stores in the 5000 to 20,000 square foot range, attractive acquisition candidates were hard to find.
In 2007 WFM moved to purchase struggling Wild Oats Markets- Whole Foods’ biggest competitor in natural and organic foods- for $700 million. Wild Oats operated 109 stores in 23 states under the Wild Oats Market, henry’s Farmer Market, and Sun Harvest Market.
WFM spent about 0.5 percent of its revenues on advertising, a much smaller percentage than conventional supermarkets, preferring instead to rely primarily on word-of-mouth recommendations and testimonials from customers.
Since one of its core values was to satisfy and delight...