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Retail Business Environment

Notes

Case Study Whole Foods Market

hole Foods Market is a US-based food retailer specializing in natural and
organic food. As of 30 September 2007, the retailer operated 276 stores organized
Winto 11 geographic operating regions; 263 stores in the US, 7 stores in Canada,
and 6 stores in the UK (Whole Foods Market, 2007).
Whole Foods Market opened its first store in Austin, Texas, in 1980. Founded by John
Mackey (now the CEO) and Renee Lawson Hardy, owners of Safer Way Natural Foods,
and Craig Weller and Mark Stiles, owners of Clarksville Natural Grocery, these pioneers
anticipated, well in advance of the competition, the consumer’s growing appreciation and
demand for organic and natural food. Whole Foods Market has brought organic food to
the mass market, and its stores are destination shopping experiences (Rigby, 2007a).
According to Rigby (2007a):
‘Its aisles juxtapose South Pacific breadfruit, cockles and handmade crackers. Vegetables
and fruits are piled into baskets as if just plucked from the field. Whole Foods has changed
the way Americans view organic and natural foods, taking it into the mainstream. If the
company succeeds in the UK, it could blow apart the dominance of the traditional
supermarkets in the burgeoning organic food sector.’

Whole Foods Markets began its domestic US expansion into Louisiana in 1988 and
California in 1989. The company’s subsequent US growth was based on a range of mergers
and acquisitions such as those with Well Spring Grocery, North Carolina, Bread and
Circus, Massachusetts and Rhode Island, Bread of Life, Northern California, and, most
recently, with Wild Oats, a major US competitor.
In terms of its international operations, Whole Foods Market is still a young company. As
with many US retailers, Whole Foods Market’s first foray into the international arena was
a cross-border move into the Canadian market in 2002. Its Canadian operations are
concentrated in two states: 2 stores in Ontario (Oakville and Toronto) and 4 stores in
British Columbia (Vancouver, 3; West Vancouver, 1).
The year 2004 marked the company’s first entry to the UK market, when it acquired the six
‘Fresh and Wild’ stores that operate in London (Camden, Soho, Notting Hill, Clapham
Junction, Stoke Newington) and Bristol (Whole Foods Market, 2008). This acquisition
paved the way for Whole Foods Market to study the UK consumer’s growing desire for
organic food that ultimately led to the June 2007 grand launch of the Whole Foods Market
fascia in Europe (Sherrell, 2008). The retailer chose the upmarket area of Kensington in
London as its first location, having acquired the 80,000 square foot Barker’s department
store building in 2005. This statement London flagship store is Whole Foods Market’s
equal largest store (along with its headquarters in Austin, Texas) and testament to its
intention to conquer the European consumer with its natural and organic foods supermarket
offering.
The three-storey flagship store, the UK’s largest dedicated food store, also houses a wine
shop, bakery, charcuterie, cheese shop, and a bar selling organic beer, as well as eleven
restaurants and takeaways. The dining experience is the key differentiator between the
London store and any of its North American stores, because the retailer has been able to
acquire a licence to sell alcohol. According to David Lannon, the executive in charge of the
European expansion: ‘We simply could not do anything like this back home’ (cited in

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