SAMIRA GHAFFARISHANNON KENNEDY

JOSH MCGUIREPAUL MAURER

Company Overview

CEO John Mackey Founded September 20, 1980 in Austin, TexasFounders: John Mackey, Renee Lawson, Craig

Weller, Mark Skiles Merged Safeway and Clarksville Natural

GrocererBegan expansion in 1984 (Houston, Dallas,

New Orleans)

Company Overview - Acquisitions

Growth was fueled by acquiring other local natural food chains throughout the 90’s

Chains in North Carolina, Massachusetts, Rhode Island, Los Angeles, Northern California, Florida, Detroit and Boston

Initial Public Offering on January 23, 1992 at $2.13/share

2001 moved into Manhattan, generated interest from media and financial industries

International Expansion

2002 moved into Canada2004 expanded into the United Kingdom299 total Whole Food Market retail stores

287 in the United States 6 in Canada 5 in the United Kingdom Canada/United Kingdom stores accounted for 3% of

net sales

Employment Overview

47,478 U.S. Employees1,901 Outside U.S. EmployeesSalaried: Associate Store Team Leader

($68,405)Hourly: Prep Food Service Team Member

($23,337)4,287 jobs lost in 2010, 9% job decline617,696 applicants for 1,160 job openingsNon-UnionAll stores are company owned

Sales by Product Types

Corporate Strategy- Growth Strategy

External growth strategy

Increase of stores

Differentiation through customer satisfaction

Measurements of performance

“Green” initiative

Store Growth

2006 2007 2008 2009 20100

50

100

150

200

250

300

350

Number of Whole Food stores by year

Differentiation

Aims to make customers their first priority and satisfy their needs

*http://www.wholefoodsmarket.com/company/corevalues.php

Evidence of Customer Satisfaction

2007 2008 2009 201065

70

75

80

85

90

Customer Satisfaction Index

Whole Foods Market Publix KrogerSafeway Industry

Performance Measurements

 

Whole Foods Market

Publix Grocery

Revenue of FTE

$198,802.74 $359,057.91

ROI of Human Capital

$1.90 $2.15

Competitive Advantage – “Green Mission”

http://sec.gov/Archives/edgar/data/865436/000110465910059917/a10-19737_110k.htm

Whole Foods aims to have wise environmental practices

2.8 billion megawatt hours of wind-based renewable energy has been purchased

14 stores and 1 distribution center is using or hosting rooftop solar systems

WF discontinued plastic grocery bags at checkout in 2008. Implemented a reusable bag refund at checkout. $.05 per reusable bag

2007 WF introduced fiber packaging in the prepared foods department

“Green Mission” Achievements

http://sec.gov/Archives/edgar/data/865436/000110465910059917/a10-19737_110k.htm

Whole Foods earned 6 EPA Green Power Awards from 2005 to 2010

11 stores received Leadership in Energy and Environment Design (LEED) Certification by U.S. Green Building Council

2 stores have earned Green Globes from the Green Building Initiative

First national retailer to provide Forest Stewardship Council (FSC) certified paper bags originating from post-consumer recycled fiber

Figure 1: (Historical ACSI Scores)

HR Professionals

2010 Financial Statistics*

*For fiscal year ended 9/26/2010

Comparative Financial Statistics*

*For fiscal year ended 1/1/2011

5 year stock performance

2007 2008 2009 2010 2011

39.84

9.41

27.35

50.41

61.08

WFM Stock PricesOver Past 5 Years

Exemplary Area

Performance Management• Conducted a phone interview with Daniel

Gomez, store manager of Annapolis Whole Foods

• Whole Foods uses a Gainsharing system • System of sharing with employees greater-

than-expected gains in profits and/or productivity

• Percentage of sales is dedicated to labor, then the shortage from labor is re-distributed to team members

• Motivates employees to work harder in order to have a greater shortage to distribute amongst employees

Ranking

All-Star RankingStore LevelEmployees are rewarded at an all-star: top

sales in country, top sales in regionWhole Foods employees feel motivated when

they receive public acknowledgment Money is not the only motivator

“Cool-Bean” Program

Customer Service program based on comments & feedback from customers about employees at a store level

If customer mentions the employee doing a good job at work, employee is granted with a “cool bean”

5 Cool Beans = $50 Visa Gift Card

10 Cool Beans = Jacket & $50 Visa Gift Card

Up to 30 Cool Beans = Jacket & $250 Visa Gift Card

Program rewards employees who have superior customer service skills

Team Leader Bonus Programs

Team Leaders receive a certain amount of money based on different categories of sales, i.e. sales per labor hour, margin sales

Occurs every fiscal period

Motivates team leaders to work harder in order to receive the bonus

Overall Performance & Feedback

Whole Foods hold leaders to high standardsOnce a year managers sit down with leaders and go

over job expectations and responsibilitiesOpportunity for leaders to get feedback about

performance Every period team leaders & employees are evaluated

based on margin, labor, etc. Every 3 months moral surveys are conducted to give

employees a chance to express feelings about all areas or issues that might harbor problems, i.e. working environment, lunch and break periods, pay scales, and communication

Strengths of Whole Foods

Selection rate: .18%Compressed

workweekTelecommunicatingReward programs

increase performance which increase company sales

High Diversity-45% minorities and 44% women employees

Photo from: http://www.keymechanical.com/Project%20Photos/Whole%20Foods%20at%20Bellevue

%20WA.JPG

Weaknesses of Whole Foods

Product recalls erode brand image 12 recalls in 2011 as of April 27 19 recalls in 2010 71 recalls in 2009 7 recalls in 2008

15% turnover rate 9% decline in jobsNo paid leaveNo onsite childcare

Future of Whole Foods - Opportunities

Increasing demand for organic products

Increasing popularity of private labels will improve margins

Rising popularity of online retailing

Future of Whole Foods-Threats

Competition from other grocery stores

Increase in number of organic grocery chains Increases the competition for vendors and suppliers to

supply Whole Foods

Economic downturn in US affects consumer spending

Stringent regulations impose additional liability

Keys to Whole Foods Past & Future Success

Expand global marketCulture sets them apart. Need to maintain current

culture and continue to improve based on employee surveys and feedback

Stay customer focusedContinue to motivate employees and team leaders to

maintain a hard working staff that creates profit for Whole Foods

Change values to stay competitive in market place Past values: Promote local organic ingredients Current values: Improve relationships with suppliers and

vendors Promote healthy lifestyle through eating healthy

References

CNN Money. (2010). 100 Best Companies to Work for in 2010. Retrieved May 3, 2011, from CNN Money: http://money.cnn.com/magazines/fortune/bestcompanies/2010/snapshots/18.html

Historical ACSI Scores. (n.d.). Retrieved March 24, 2011, from The American Customer Satisfaction Index: http://www.theacsi.org/index.php?option=com_content&task=view&id=206&Itemid=215

Organizational Chart Whole Foods Market. (2011, March 7). Retrieved March 24, 2011, from The Official Board: http://www.theofficialboard.com/org-chart/whole-foods-market

Safeway. (n.d.). Form 10-K. Retrieved March 25, 2011, from http://quote.morningstar.com/stock-filing/Annual-Report/2011/1/1/t.aspx?t=XNYS:SWY&ft=10-K&d=54c0fdfbbe89eb36fa3704cf8e6a7017

Whole Foods Market. (n.d.). Form 10-K. Retrieved March 24, 2011, from http://www.wholefoodsmarket.com/company/pdfs/2010_10k.pdf

Mathis, R.L. & Jackson, J.H. (2008). Human Resource Management (12th ed.). Thomson-Southwestern. Mason: OH.