Competitive Forces & SWOT Analysis
October 23, 2011
Discuss the trends in retailing of organic foods and the impact of these trends on Whole Foods Market.
The combined sales of foods and beverages labeled as “natural” or organic was about $62 billion in 2007. This represented about 7.3 percent of total U.S. grocery store sales of roughly $850 billion. While sales of organic products had increased at double-digit rates in the 1990s, growth had slowed down to the 7 thru 9 percent range since 2000 (Thompson, Strickland & Gamble, 2010). According to the Organic Consumers Association, sales of organic foods in the United States hit $17 billion in 2006. This number increased by 22 percent from 2005. When natural foods and beverages were lumped in with organic foods and beverages in 2006, U.S. retail sales increased to $28.2 billion. Organic food sales represented 3 percent of total U.S. retail food sales. About 31 percent of overall organic food sales in 2006 were through mainstream supermarkets and grocery stores. In addition, 24 percent of organic sales were through leading natural food supermarket chains, such as Whole Foods, Wild Oats, and Trader Joe’s.
According to the United States Department of Agriculture (USDA), 2000 was the first year that more organic food was sold in supermarkets and grocery stores than in the country’s 14,500 natural food stores. Since 2002, most mainstream supermarkets had been expanding their selections of organic products. Fresh produce was the most popular organic product. Meats, dairy, bread and snack foods were among the fastest growing organic products. Most supermarkets stocked a selection of organic food items and the number of items they carried was growing (Thompson et al., 2010). Whole Foods Market had launched its own private-label brand of organics. In 2006, it was ranked as the 24th leading supermarket retailer in North America....