- Industry leader for grocery stores in the natural and organic food industry
- First national "Certified Organic" grocery store
- Main goal is to “promote the vitality and well-being of all individuals by supplying the highest quality, most wholesome foods available” (Whole Foods Market, 2015)
- WFM increased sales to $15.7 billion
- Kroger and Sprouts Farmer’s Market had the advantage of having lower prices compared to WFM
- However, WFM represents issues that people care about, such as local suppliers, animal welfare and sustainability, as well as the advantage of brand name and scale
Strengths and Weaknesses
- WFM has an advantage because they pay for store expansion almost exclusively by using free cash flow (Stoffel, 2016).
- Whole Foods has more financial fortitude than its competitors, with a better cash-to-debt position
- Main weakness is the fact that they have higher prices than their competitors
- Priorities for WFM in the upcoming year are to increase sales growth by 2.5% or higher, obtain a diluted EPS of $1.42 or greater and strive for ROIC of 11% or greater (WFM, 2016).
ROA and ROCE
- In 2016, WFM had a return on assets ratio of 8.39%, while the industry average was 10.78%
- ROA for Kroger in 2016 was 6.33% and Sprouts Farmers Market at 8.61%
- ROCE: WFM had a ratio of 17.14%, Kroger calculated to be 15.14% and Sprouts had the highest of 19.13%.
- In comparison to the industry averages, WFM is performing sufficiently.
- Whole Foods Market sees a growing market opportunity as their customers are showing greater interest in what they eat and where their food is coming from
- "embraced the responsibility to nourish the health and well-being of people and the planet by being the authentic purveyor of food for the greater good” (WFM, 2016).
- Whole Foods Market. (2016). Annual Report 2016. Retrieved March 22, 2017, from http://s21.q4cdn.com/118642233/files/doc_financials/2016/Annual/2016-WFM-Annual-Report.pdf
- Stoffel, B. (2016, October 05). Better Buy: Whole Foods Market vs. Kroger. Retrieved March 22, 2017, from https://www.fool.com/investing/2016/10/05/better-buy-whole-foods-market-vs-kroger.aspx