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Case 2: Whole Foods Company

Morgan La Femina MBA 710

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Company History: Whole foods is natural foods, fresh foods supermarket chain. John Mackey, Rene Lawson Hardy, Craig Weller and Mark Skiles founded the whole foods market in Austin, Texas. Originally, in 1978 Rene Hardy and John Mackey borrowed 45,000 dollars from relatives to open a natural foods store in Austin Texas. Two years later, they partnered with Craig Weller and Mark Skiles merging their natural foods store SaferWay with Weller and Skiles Clarksville Natural Grocery. The resulting new natural foods store was named Whole Foods Market and opened in 1980. This store had 10,500 square feet and a total staff of 19. Whole Foods Market began to expand from Austin to Houston, Dallas and New Orleans beginning in 1984. In 1989, expansion began on the West Coast with a Super Market in Palo Alto, California. Other Supermarkets in North Carolina, Detroit, Boston and on the east coast were opened through the 1990s. This round of store growth was fueled primarily by acquiring Food for Thought and Harrys Farmers Market stores in2001, located in northern California and Atlanta respectively. In 2002, Whole foods acquired Fresh and Wild in the United Kingdom. Another venture, Wholefoods.com was developed in 1999 and WholePeople.com in 2000. Later in 2000, WholePeople.com merged with Gaiam, Inc. and WholePeople.com was subsequently replaced with Gaiam.com.

Mission Statement Analysis: "Whole Foods Market is a dynamic leader in the quality food business. We are a mission-driven company that aims to set the standards of excellence for food retailers. We are building a business in which high standards permeate all aspects of our company. Quality is a state of mind at Whole Foods Market."

Overall analysis of the mission statement

Whole Foods Markets core values are to provide natural perishable food products that are wholesome and safe to eat, provided by employees who work as a team, where they can flourish and grow as individuals. Unfortunately, these values are not stated in their mission statement. Whole Foods Market mission statement unusually says they are a mission driven company, but the only value promoted is quality. Their core values can be found not in their mission statement but in various sections of their financial documents and literature. These values should be aggregated into the mission statement. This is important for Whole Foods as a company because much of their expansion has been 2|Page

through the acquiring of other natural food stores chains. These acquired stores may have internal cultures dissimilar to Whole Foods whereby Whole Foods would benefit by a strong mission statement.

Components of the mission statement:

1. Customers (Who are they?) Their mission statement does not mention their customers however; other documentation from Whole Foods mentions their customers as the public and to large extent farms, which are local to each Whole Foods store.

2. Products or Services (What are they?) Whole Foods products and services are not listed in their mission statement; however, their 10k mentioned their products as fresh produce, fresh fruit, organic products, hormone free milk and cheese, meats from animals raised without hormones, antibiotics and eggs from cage free hens.

3. Markets (Where are they doing business?) Whole Foods mission statement does not state their markets however, this information can be found in their financial statements. Whole Foods primarily does business in America, Canada and in the United Kingdom. Specifically they have markets in Alabama, Arizona, Arkansas, California, Colorado, Connecticut, DC, Florida, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, Virginia, Washington, Wisconsin and overseas in the UK and Canada.

4. Technology (How is it used by the company?) Technology is not mentioned in Whole Foods mission statement however, they do mentioned a very detailed food inspection process, the tracing of food from farm to store to insure the nature of the food is known and how the stores are organized, by teams and team leaders.

5. Concern for Survival and Growth (Profits, etc.) Whole Foods mission statement indirectly mentions survivability and growth when it speaks of high standards of excellence and inherent quality. There survivability is based on providing a wide variety 3|Page

of high quality organic foods to customers by experienced friendly team members. This strategy differentiates them from other chain supermarket stores allowing them to compete not on price or volume but on quality, culture and customer experience.

6. Philosophy (Any?) Whole Foods philosophy is stated to be a company that is a leader in providing high quality foods to customers. They set high standards for the food products they sell, the employees they hire and what distributers they purchase their foods from. These farms and distributers must meet the premium standards set by Whole Foods for Whole Foods to purchase products from them for resale to the public. Whole Foods as a company is committed to providing the customer a viable and healthy alternative to supermarket food while supporting the local community.

7. Self-Concept (Distinctiveness?) Whole Foods self-concept is only partially apparent in their mission statement. They wish to be the leader in providing high quality foods to the public. However, in their literature expands on this in that they view high quality food as an extension of living a whole value filled life. They see whole food as a lifestyle, including eating healthy food, eating the right foods, exercising, excelling in work, being vested as a person in the community and being involved in the culture of each community they have a store in. The company sees itself as an extension of the communities they serve not just a supermarket selling to those people who happen to enter the store.

8. Concern for Public Image Whole Foods is concerned about their public interest. Their existence as a company is inherently dependent on the image they project to the communities they serve. If they do not prove to the public that they live the Whole Foods mission of quality then they may lose the trust of their customers and their patronage. They believe their strength is dependent on their employees team members, their high standards, their motivation and their sense of purpose. They as a company support the health and wellbeing of their customers, their employees and seek to express this to the public. Whole Foods is concerned about their public image and the expression of their internal corporate image, externally because the companys future depends on their public image.

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9. Concern for Employees Whole Foods mission statement only mentions dynamic leadership and high standards, which permeate the organization. Whole Foods literature states that they seek to promote a sense of egalitarianism and shared fate. They seek to provide each team member a sense of purpose and mission, They offer a type of gain sharing program, stock options and the company offers a 401k program for its employees. However, their voluntary turnover for employees in 2008 was 23%.

External Analysis: Industry Analysis: The External Factor Evaluation (EFE) Matrix for Whole Foods

Key External Factors Opportunities Weight Rating Weighted Score 1 2 3 4 5 Threats 1 2 3 4 5 Increased price pressure from fresh foods Intensely competitive industry Potential new regulatory practices Significant indebt with interest High ratio of perishable products as opposed to other companies in the industry Total The average total weighted score is 2.79 1 0.13 0.12 0.09 0.10 0.06 2 2 3 1 2 0.26 0.24 0.27 0.1 0.12 Higher quality products than industry Emphasis on organic farming, humane grocery Collaborating with local farming Strong customer trust in store and brand Opportunistic real estate strategy 0.12 0.11 0.1 0.08 0.09 4 3 4 4 3 0.48 0.33 0.40 0.32 0.27

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Rational: Whole Foods total weighted score is 2.79, which is slightly above average for companies in the grocery/supermarket industry. Whole Foods is taking advantage of their opportunities but is responding poorly to its threats, many of them long term in nature.

External Opportunities: 1. Higher quality products than industry Whole Foods is a market leader in providing high quality organic and all natural foods to the public. They are able to compete with larger supermarket chains on quality and partially on cost but quality is the key differentiator from others in the industry. 2. Emphasis on organic farming, humane grocery Unlike other chain supermarkets customers know the history of the food products purchased at a Whole Foods supermarket. This background food history knowledge is unique among the industry and creates a market for those potential customers who value this type of information. It is the ability to trace and determine the quality of the food sold at Whole Foods that creates a market opportunity for the company against its larger competitors.

3. Collaborating with local farming Whole Foods purchase much of its stock from farms that are local to each store. This collaboration creates a cultural bond between the farmer, the customer and the stores, which Whole Foods operates. This culture in turn creates brand loyalty that is stronger that it would be between their customers and others in the industry.

4. Strong customer trust in store and brand Whole Foods customers know what they are buying when they make a purchase at their stores. They know that Whole Foods reputation for providing organic fruits and vegetables and humanly grown and processed meats must be maintained for the company to be viable. This may not be the case with its competition.

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5. Opportunistic real estate strategy Whole Foods purchases premium real estate on sites where there is existing trade and where square footage is optimal. They seek to acquire other smaller local and regional chains located in desirable areas that have existing experienced employees. In addition, Whole Foods is relocating several of its smaller stores to larger areas with better visibility and parking. This has given them an overall 124% increase in size.

External Threats: 1. Increased price pressure from fresh foods Any dramatic change in weather patterns for a growing season or for several growing seasons can cause an increase in the price of fresh fruits and vegetables. As they select high quality foods for sale at their stores, any increase in price and a decrease in quality can impact their sales and the reputation of the company. An increase in food prices followed by the inability to find enough high quality food products in a category could be detrimental to the companys profits.

2. Intensely competitive industry Whole Foods faces intense competition from other supermarket chains. They face competition from regional supermarkets, other natural type supermarket chains such as Trader Joes, Wegmans, and Fresh Market chain, national chains such as Wal-Mart, club type stores, smaller local sites, farmers markets and emerging food delivery companies. Any change in their strategy will not only affect Whole Foods but others in the industry. These companies compete on all levels Whole Foods competes at though Whole Foods attempts to differentiate itself on the quality and nature of the products they sell.

3. Potential new regulatory practices Any change in regulations that restrict or relax rules on how food is inspected, grown, certified and stored can negatively affect Whole Foods. If the regulations on what qualifies as certified organic are relaxed other supermarkets will benefit against Whole Foods. If current 7|Page

rules on how a food is stored are enacted then this could increase Whole Foods storage costs. If the company is required to change or add labeling to certain products this could reduce those products profit and the companys revenue.

4. Significant indebt with interest In 2009, Whole Foods had sizable indebtness with interest. The companies 10k states that their future revenue may be significantly reduced because of their need to pay this debt. Any significant debt in relation to revenue can be detrimental to a company.

5. High ratio of perishable products as opposed to other companies in the industry Unlike other supermarket chains, Whole Foods has a much higher percentage of perishable products. This increases their product loss as opposed to others in the industry. Any significant product lost will be detrimental to the company.

Porters Analysis: Rivalry among competitors: High They face very strong competition from other supermarket chains and small individual stores. This competition is from similar stores as well as superstores. They face completion from similar format supermarkets such as Trader Joes, Sunflower Farmers Market, Fresh Market chain and Central Market stores. In addition, Whole Foods also faces completion from more traditional supermarket chains such as Wal-Mart, Kroger, Safeway, Albertsons, and Winn-Dixie.

Potential entry of new competitors: High Whole Foods faces a high likelihood of potential new competitors. These new competitors can be growing mom and pop grocery stores, expanding smaller similar format supermarkets such as Sunflower Farmers Market, Central Markets and Jungle Jims. New competitors can come from large superstores such as Wal-Mart should they expand into the organic foods market.

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Potential Substitute of products: High Foods can be substitute most readily for other foods of equal quality costing less, lower quality costing less or a different product altogether. Not only can one food be substituted for another but can be purchased at a different supermarket so lower priced discounters of organic and natural foods can compete with Whole Foods on cost and quality.

Bargaining power of suppliers: Low Food products originate at farms, these farms sell to intermediaries who then sell it to food processing facilities. It is these intermediaries, food processing companies and wholesalers who have the most bargaining power in relation to suppliers. Farms and cattle ranches for example do have some bargaining power based on the volume of fruits and vegetables harvested or cattle sold but they are dependent on the environment and the volume of foodstuffs produced by other farmers.

Bargaining power of consumers: High Consumers have a high level of bargaining power in relation to supermarkets. Shoppers can chose from a variety of grocery stores within a few miles of their home, they can chose what types of food stuffs to buy in a store and they can shop at multiple stores to complete their entire purchase. In addition, shoppers can substitute one food for another, chose products based on price, quality, sale, marketing, its packaging, freshness, shelf life and many other characteristics.

Target Scope Low Cost Product Uniqueness

Broad

Cost Leadership Strategy

Differentiated Strategy

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Narrow

Focused Strategy (low cost)

Focused Strategy (Differentiation)

Porter rational: Whole Foods will have to select a broad product line that is differentiated from other supermarkets with a strong focus on perishable foods. They will need to compete not only on quality but also on cost for the next few years unlike previously where they competed only on quality and variety. They need to lower their operating costs or other internal costs in order to lower the overall cost of the perishable goods they sell to the public. Because Whole Foods expanded as a company during better economic times, they must now factor in the possibility of a permanent change to consumers shopping patterns. These altered shopping patterns are being shaped by high unemployment, low economic growth and stalled wages. Unless Whole Foods offers a variety of fresh food products that appeal to cost conscious buyers, other competitors like Trader Joes, Wegmans and Safeway will expand market share while Whole Foods will lose market share. The Competitive Factor Evaluations Matrix: Whole Foods Critical Success Factors Brand recognition Product Quality Price Competitiveness's Management Financial Position Customer Loyalty Global Expansion Market Share Total Weight 0.13 0.13 0.12 0.12 0.13 0.12 0.12 0.13 1.00 Rating 4 4 2 3 2 4 3 4 Score 0.52 0.52 0.24 0.36 0.26 0.48 0.36 0.52 3.26 Trader Joes Rating 4 4 3 4 3 4 2 3 Score 0.52 0.52 0.36 0.48 0.39 0.48 0.24 0.39 3.38 Rating 4 4 4 4 3 4 2 3 Score 0.52 0.52 0.48 0.48 0.39 0.48 0.24 0.39 3.50 Wegmans

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The Competitive Factor Evaluations Matrix shows that Whole Foods is only marginally positioned against its competitors Trader Joes and Wegmans. They need to not only compete on price but on reputation, quality, variety and cost. They have over expanded their store numbers and as a result have incurred a large amount of debt. Their purchase of Wild Oats caused a significant lost to be incurred by Whole Foods and shopping at Whole Foods stores has declined by 19%. In addition, on average only 28 dollars is spent by shoppers at Whole Foods while its nearest competitors all average higher, Trader Joes averages 38 dollars spent per shopper while Safeway averages 45 dollars spent per shopper per store visit. Whole Foods needs to cut costs, increase value and maintain or expand on the variety of high quality low cost fresh foods in order to maintain its profitability.

Internal Factor Evaluation Matrix: Industry Analysis: The Internal Factor Evaluation (IFEM) Matrix for Whole Foods

Key Strengths

Weight Rating Weighted Score

1 2 3 4

Brand recognition Consumer good will towards company Partnered with local farmers Increase low cost/high quality product development

0.12 0.09 0.1 0.1

3 3 3 2

0.36 0.27 0.30 0.20

Strong employee empowerment

0.09

0.27

Key Opportunities 1 Train and develop new managers for senior roles in the company 0.1 2 0.2

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2 3 4 5 Total

Close unprofitable stores Reduce long term debt Lower store costs/distribution costs Strategic acquisitions and joint ventures

0.11 0.13 0.09 0.07 1

2 2 3 2

0.22 0.26 0.27 0.14

The average total weighted score is 2.49

Rational: The average total weighted score for Whole Foods is 2.49, which is just below average for companies in the supermarket industry. Whole Foods faces strong competition from other supermarkets in terms of organic certification, quality, freshness, uniqueness, variety, cost and location. Moreover, Whole Foods has above average long term debt, has closed some of its Wild Oats supermarkets after their acquisition, has over expanded its market base and has slowing same store sales. They also need to train new managers for increasingly complex roles and groom them for upper management in the unfortunate event of a key leader leaving the company. Whole Foods needs to leverage their brand name and increase marketing as well as incentivize repeat customers return to their stores. They need to retain quality employees and offer competitive pay for those knowledgeable in whole food products.

Key Strengths: 1. Brand recognition Whole Foods needs to leverage their brand more than they have in the past few years. This can be done by increasing in house branded foodstuffs as well as increasing marketing. They can increase marketing through non-traditional channels, the internet and through mobile technologies. Whole Foods can offer regional coupons and expand delivery options in areas where their stores are located. 2. Consumer good will towards company

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Whole Foods has moderately strong consumer good will. They can increase this good will through saving or shopper cards, issuing coupons, partnering with other companies to issue discounts and through the expansion of employee benefits packages. They can promote some of the good work they accomplish such as advocating for the treating of farm animals humanly and how they purchase local farmers produce. 3. Partnered with local farmers Whole Foods has collaborated with local farms. They can expand this relationship to regional farms and also promote this relationship with the public at large. They can invest in technologies that allow the company to ship these farm products quickly to market and develop in store methods that would maintain the foods freshness longer. 4. Increase low cost/high quality product development The company needs to increase their assortment of low cost high quality products as well as expand their in store brands. This is needed in order to offer increased value to customers in a faltering economy. They also need to do this in order to increase same store purchases of which they rank last among their competitors. 5. Strong employee empowerment Whole Foods in 2009 had approximately 53,500 team members of which 43,000 were full time. Whole Foods involves their team members at all levels of their business. They also award team members with stock options, leadership grants and service hour grants. Team members are provided with benefits and are able to vote on the makeup of those benefits every three years.

Key Opportunities: 1. Train and develop new managers for senior roles in the company Whole Foods needs to aggressively train and groom new leaders for senior roles within the company. As of 2009, all Whole Foods executive officers were in their mid-fifties with John Mackey the CEO and of the original founders age 56 with 31 years tenure. With each executive officer having at least 10 years tenure, any one of them leaving could be detrimental to the management of the company. If Mackey leaves much of the knowledge that created and also maintains the viability of Whole Foods will be lost. 13 | P a g e

2. Close unprofitable stores Not only has Whole Foods closed half of its Wild Oats stores but it may need to close more of them and several Whole Food supermarkets as well. It needs to eliminate stores that are not profitable and focus on those that are profitable while paying off its long-term debt. 3. Reduce long term debt As of 2008 Whole Foods is almost a billion dollars in debt much of it from its acquisition of Wild Oats along with 36 million in interest alone. In 2008, Whole Foods posted a negative net working capital of 46 million dollars along with 2.1 billion in store operating expenses. As a company, Whole Foods cannot continue to operate with such high store expenses, debt and interest payments for long without declaring some type of reorganization. 4. Lower store costs/distribution costs Whole Foods must lower its store operating costs, its distribution costs as well as the costs of its goods. Its store operating expenses for 2009 were 2.1 billion dollars, while its cost of goods sold was 5.2 billion. This is opposed to their sales of only 7.95 billion dollars. Their distribution in relation to their competitors is not as efficient and is comparably inefficient by Wal-Mart and Safeways standards. 5. Strategic acquisitions and joint ventures Whole Foods must stop acquiring other supermarkets but strengthen relationships with farms, farmers and perhaps retailers. They could offer benefits to those who shop frequently with them for other stores such as by providing discounts at retailers for items such as clothes and household items. They also could negotiate long-term contracts with farmers for future guaranteed deliveries of produce barring unforeseen events, which might lower the costs of goods purchased by Whole Foods as well as reduce overhead by those partnered farms.

Summary of Operating Results For the year ending December 31st In millions of dollars except per share amounts 2009 2008 2007

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Sales Cost of Goods Sold Gross Profit Comparable Store Sales Net Income Net Working Capital Interest Expense Provision for Income Taxes Earnings Per Share Dividends Declared Per Share Net Income Per Share- Diluted

8,031,620 7,953,912 6,591,773 5,277,310 5,247,207 4,295,170 2,754,310 2,706,705 1,711,229 -3.1% 146,804 371,356 (36,856) 104,138 .85 .00 .85 4.9% 114,524 (43,571) (36,416) 91,995 .82 .60 .82 7.1% 182,740 (104,364) (4,208) 121,827 1.30 .87 1.29

Whole Foods financials show in 2009 that as a company they had a decline in store sales, paid significant interest on long-term debt, had a high cost of goods sold and did not declare dividends for that year. In addition, their gross profit grew slightly from 2008 to 2009, increased their provisions for income taxes, and had a reduction in net income from 2007 but an increase from 2008 to 2009. In 2009, Whole Foods sales growth was only .98%, gross income growth was only 1.76%, accounts turnover was 76 days, a PE ratio of 12.76, a debt to equity ratio of .49 and a current ratio of 1.35. These financials show Whole Foods as having high debt, marginal profit and average turnover for the goods they sold in their industry. Moreover, their gross income was hampered by high debt, their PE ratio is average, and their debt ratio is above average and their debt to equity ratio shows in 2009 that they would not be able to meet their debts with liquid assets. SWOT Matrix:

SWOT
Strengths S
Brand Recognition Consumer good will Employee empowerment

Weaknesses W
High debt High cost products Slowing revenue

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Opportunities O
Ethical labor and environmental brand exposure Strong team values Lower store costs

SO Strategies
Increase marketing Develop shopping incentives Train team members for management

WO Strategies
Pay off debt Reduce new store openings and close unprofitable stores Expand low cost brands

Threats T
Increased price on main ingredients Competing Supermarkets organic brands High ratio of perishable products brands

ST Strategies
Expand in store Whole Foods

WT Strategies
Expand shopping experience to partnering stores Increase efficiency of food distribution Increase long term contracts with farms at reduced expense

Offer sales on basic foods Increase organic foods that have a higher shelf life

Whole Foods SWOT matrix shows that the company is burdened by debt and by the ability of their competitors to out sell and out compete them. Whole Foods not only has to increase their same store sales but also must increase the average amount of sales each customer purchases per visit. They must reduce the cost to them in selling their products as well as increase low cost high quality brands. This is something that other larger chain grocery markets can more easily accomplish because they can purchase at a greater volume. Their competitors are also much more efficient at distributing their fresh food products as opposed to Whole Foods. I believe the most important goal for Whole Foods in 2009 would be to pay off its long-term debt and then market their brand and products, of which they do little of while training new managers for advance corporate roles.

Space Matrix: Financial Position Leverage Working capital Cash flow Ratings 2 2 3 7 Industry Position Growth potential 2 16 | P a g e

Profit potential Financial stability

3 2 7

Stability Position Price range of competing products Competitive Pressure Price elasticity of demand -3 -4 -3 -10 Competitive Position Market Share Product quality Customer loyalty -3 -1 -2 -6 Conclusions:

FP Average = 7/3 = 2.3 IP Average = 7/3 = 2.3 SP Average = -10/3 = -3.33 CP Average = -6/3 = -2

Space Matrix Coordinates: X-axis: CP+IP or (-2 + 2.3) = .3 Y-axis: FP+SP or (2.3 + -3.33) = -1.03

Space Matrix analysis:

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FP 6 5 4 3 2 1 CP -6 -5 -4 -3 -2 -1 -1 -2 -3 -4 -5 -6 SP 1 2 3 4 5 6 IP

The Space Matrix show that Whole Foods is competing fairly well in a very unstable market. The supermarket industry is comprise of aggressive large chain stores, warehouse stores, small chains, mom and pop stores, open air markets, farmers markets, discount dollar type stores and even pharmacies and food delivery companies. These companies compete with Whole Foods on a variety of levels, depending on the store market niche, the size of the company and where it is located in relation to a Whole Foods store. Whole Foods is competing fairly well, in that in order to assure its continued existence it needs to just reduce its debt and slow its expansion. Other factors that will help it compete such as increasing store brand products and increase its efficiency will have beneficial effects but they are not as critical to the success of the company as debt reduction. BCG Matrix: High Medium Low

Medium

Stars Store brand

?s Low shelf live products Dogs High variety specialty brands

Low

Cash Cows Prepared foods

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The BGC Matrix shows that Whole Foods store brands are doing well while high variety specialty brands are not. For example, high variety specialty brands could be having twenty different varieties of first press olive oil. These types of products take up a great deal of shelf space while producing little revenue for the company. High cost prepared foods bring in a great deal of revenue for Whole Foods but this is changing as the slow economy has altered customers food shopping patterns. Customers are more likely to prepared foods at home than by already prepared foods at Supermarkets. This will affect their cash cows and as such, they need to increase their store brands. Because of changing regulations, Whole Foods organic foods may need to meet certifications that may cost more for Whole Foods and reduce the profitability of those products for them.

Pro forma Statement:


2010 Projected

Income Statement (in thousands unless specified) Sales Revenue Cost of Goods Sold Relocating and Store Closure Expenses

2008

Comments

7,956,912 5,247,207

8,500,000 4,500,000

36,545

40,000

Increased sales due to an expansion of store brands, reduction in specialty brands and increased efficiency in distribution. Lower costs of goods sold through better distribution and increase in store closures costs due to closing of revenue sinks Increase in operating income due to closing of poorly operating stores and increase in same store purchases

Operating Income

236,238

275,000

Accounts Payable Long Term Debt Current Liabilities

181,134 928,790 666,177

175,000 750,000 600,000

Reduction of accounts payable do to better turnover, reduction of long term debt through paying of principle and current liabilities as well

Number of Stores Dividends per Share (dollar amount)

275 -

265 1

An increase in the number of store closings offset by new store opening but with a decrease in projected store openings

Cash

30,534

40,000

Cash on hand increases due to SWOT implementation

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The above pro forma statement shows a portion of the Consolidated Statements of Operations and Balance sheet affected by my recommendation and the external factors discussed in the Internal, External and SWOT matrix. The above Pro Forma statement is comprised of actual 2008 data and projected 2010 data.

Epilogue Section: Since the case was written net sales have increased, to 10.11 billion dollars, sales growth has increased to 12.24% and long-term debt has decreased to an amazing 17.44 million dollars. Total liabilities have decreased to 1.3 billion dollars while total assets have increased by 7.66% to 4.29 billion dollars. Whole Foods cash on hand has increased to 746 million dollars while gross income is 3.25 billion up from 2.75 billion in 2009. Whole Foods net income has increased three years in a row from 148.6 million dollars in 2009 to 342.6 million dollars in 2011. However, capital expenditures have cost Whole Foods increasing from 68.22 million dollars in 2009 to 370.12 million dollars in 2011. This capital expenditures increase may be due to new store openings and the renovation of existing Whole Foods stores. Whole Foods current PE ratio is 38.11 which is above average ranked 6 out of 37 while EPS growth is currently 13.60% ranked 11 out of 37 in the industry. Unfortunately, long-term debt to equity is still high at .557, which means they do not have enough liquid assets to meet their obligations should they be required to do so in the future. The above financial data shows that since the case has been written Whole Foods has made strides to increase revenue, reduce its debt and invest wisely. However, capital expenditures still show Whole Foods has a capacity to spend money it does not have which is a cause for concern.

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References

Community Giving | WholeFoodsMarket.com. (n.d.). Whole Foods Market: Natural and Organic Grocery. Retrieved July 22, 2012, from http://www.wholefoodsmarket.com/company/giving.php David, F. R. (2011). Strategic management: concepts and cases (13th ed.). Upper Saddle River, N.J.: Prentice Hall. Declaration of Interdependence | WholeFoodsMarket.com. (n.d.). Whole Foods Market: Natural and Organic Grocery. Retrieved July 22, 2012, from http://www.wholefoodsmarket.com/company/declaration.php Our History | WholeFoodsMarket.com. (n.d.). Whole Foods Market: Natural and Organic Grocery. Retrieved July 22, 2012, from http://www.wholefoodsmarket.com/company/history.php WFM Annual Income Statement - Whole Foods Market Inc. Annual Financials. (n.d.). MarketWatch Stock Market Quotes, Business News, Financial News. Retrieved July 22, 2012, from http://www.marketwatch.com/investing/stock/WFM/financials WFM Competitors | Whole Foods Market, Inc. Stock - Yahoo! Finance. (n.d.). Yahoo! Finance - Business Finance, Stock Market, Quotes, News. Retrieved July 22, 2012, from http://finance.yahoo.com/q/co?s=WFM+Competitors WFM Industry: Grocery Stores | Whole Foods Market, Inc. Stock - Yahoo! Finance. (n.d.). Yahoo! Finance - Business Finance, Stock Market, Quotes, News. Retrieved July 22, 2012, from http://finance.yahoo.com/q/in?s=WFM+Industry Whole Foods Market, Inc. 10K. (n.d.). Whole Foods Annual Report. Retrieved July 22, 2012, from www.wholefoodsmarket.com/company/pdfs/2009_10k.pdf Whole Foods Market, Inc. (n.d.). Company Statements & Slogans. Retrieved July 16, 2012, from http://www.company-statements-slogans.info/list-of-companies-w/whole-foods-market.htm Whole Foods Market named to Worlds Most Ethical Companies list - Whole Foods Market Newsroom. (n.d.). Home - Whole Foods Market Newsroom. Retrieved July 22, 2012, from http://media.wholefoodsmarket.com/news/whole-foods-market-named-to-worlds-mostethical-companies-list Whole Foods Market, Inc. Consolidated Quarterly Statements of Operations. (n.d.). Whole Foods Market, Inc. Consolidated Quarterly Statements of Operations. Retrieved July 17, 2012, from www.wholefoodsmarket.com/company/pdfs/2009_IS.pdf

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