question : "How attractive is Whole Foods market position? Is it sustainable?"
the answer should be based on the information provided
Support your answer with statistics (numbers)
Whole Foods traced its roots to 1978, when John Mackey and Renee Lawson opened a small organic grocer called SaferWay in Austin, Texas. Two years later, it partnered with Craig Weller and Mark Skiles of Clarksville Natural Grocery to launch the first Whole Foods Market, one of the country's first natural and organic supermarkets. In 1984, the company began expanding within Texas and in 1988 made its first move across state lines by acquiring the Louisiana-based Whole Foods Company; the next year it launched its first store Page116 in California. The company went public in 1992 and grew rapidly during the 1990s through both new store openings and acquisitions. Whole Foods launched its first international store in Canada in 2002 and acquired a natural supermarket chain in the United Kingdom in 2004.13 The company had consistently maintained high growth throughout the new century by increasing same-store sales and expanding its store count; same-store sales grew more than 5% in every year except 2008 and 2009, when the global financial crisis brought America into a severe recession. By 2013, the company's growth strategy had moved away from acquisitions, and management saw improving same-store sales and continued new openings as its primary growth opportunities. 14 Same-store sales - the most important growth criteria Wall Street used to evaluate retailers - had grown by at least 7\% every year since 2010, far above other established grocers' growth rates even after it began expanding its natural and organic offerings. The company had done all of this with no debt financing. Looking forward, Whole Foods management planned to eventually operate over 1,000 stores, up from the 362 it operated as of the end of fiscal year 2013.15 Exhibit 7.6 contains store count and same-store sales growth history for Whole Foods and other industry players. maintained both its favorable margins and high growth rate for years. Short, along with many other analysts across Wall Street, had been strongly in the bull camp prior to the recent earnings report. Short's report from the past month recommended to investors that Whole Foods stock was a "buy' and worth \$60 per share. This argument was based on ongoing gains to expected revemec growth and EBITDA mangins in the conning year (the report built in cxpectations of revenue growth of 11% and 14%, respectively, in 2014 and 2015 ; and EBITDA margins of 9.4% and 9.8%, respectively, in 2014 and 2015 ). The main question now ficing the team was whether to adjust its financial forecast for Whole Foods in light of recent news. Exhibit 7.7 contains a version of the forecast model with the assumptions used for Short's previous report. A s an additional benchrmark, Exhibit 7.8 reports prevailing capital market information. As Short roconsidered her position, her team fleshed out the case for both a bearish and bullish vicw on Whole Foods. Whole Foods positioned itself as "the leading retailer of natural and organic foods" and defined its mission as promoting "the vitality and well-being of all individuals by supplying the highest qualicy, most wholesome foods available. "16 The company's sole operating segment was its nanural and organic markets and nearly 97% of its revenues came from the United States. By 2013, the average Whole Foods store carricd 21,0(X) SKLs and approximately 30% of sales outside the bakery and prepared-food scgnents were organic. Whole Foods reported \$551 million in net income on \$12.9 billion in sales in 2013 , making it the clear leader of natural and organic grocers even though its numbers were still rather small compared to Kroger's net income of $1.5 billion on more than S98 billion in sales. 17 Facing increased competition in the segment, many analysts believed that Whole Foods' biggest challenge as "Whole Paycheck," and the company had historically opence its stores in high-income arcas. In response to conpetitive price matching and promotional sales, and laumched a printed value guide (The Whole Deal) that featured coupons, low-buxiget recipes, and other tips for price-conscious consumers. 12 Additionally, many Whole Foods supporters often pointed out that they were willing to pay a premium price for a premium product. The Research Report The recent collapse of Whole Foods' stock price had caught Short and her team flattionted. After all, heated conpetition in the grocery space was nothing new, even for Whole Foods, but the conmany had nonetheless Whole Foods traced its roots to 1978, when John Mackey and Renee Lawson opened a small organic grocer called SaferWay in Austin, Texas. Two years later, it partnered with Craig Weller and Mark Skiles of Clarksville Natural Grocery to launch the first Whole Foods Market, one of the country's first natural and organic supermarkets. In 1984, the company began expanding within Texas and in 1988 made its first move across state lines by acquiring the Louisiana-based Whole Foods Company; the next year it launched its first store Page116 in California. The company went public in 1992 and grew rapidly during the 1990s through both new store openings and acquisitions. Whole Foods launched its first international store in Canada in 2002 and acquired a natural supermarket chain in the United Kingdom in 2004.13 The company had consistently maintained high growth throughout the new century by increasing same-store sales and expanding its store count; same-store sales grew more than 5% in every year except 2008 and 2009, when the global financial crisis brought America into a severe recession. By 2013, the company's growth strategy had moved away from acquisitions, and management saw improving same-store sales and continued new openings as its primary growth opportunities. 14 Same-store sales - the most important growth criteria Wall Street used to evaluate retailers - had grown by at least 7\% every year since 2010, far above other established grocers' growth rates even after it began expanding its natural and organic offerings. The company had done all of this with no debt financing. Looking forward, Whole Foods management planned to eventually operate over 1,000 stores, up from the 362 it operated as of the end of fiscal year 2013.15 Exhibit 7.6 contains store count and same-store sales growth history for Whole Foods and other industry players. maintained both its favorable margins and high growth rate for years. Short, along with many other analysts across Wall Street, had been strongly in the bull camp prior to the recent earnings report. Short's report from the past month recommended to investors that Whole Foods stock was a "buy' and worth \$60 per share. This argument was based on ongoing gains to expected revemec growth and EBITDA mangins in the conning year (the report built in cxpectations of revenue growth of 11% and 14%, respectively, in 2014 and 2015 ; and EBITDA margins of 9.4% and 9.8%, respectively, in 2014 and 2015 ). The main question now ficing the team was whether to adjust its financial forecast for Whole Foods in light of recent news. Exhibit 7.7 contains a version of the forecast model with the assumptions used for Short's previous report. A s an additional benchrmark, Exhibit 7.8 reports prevailing capital market information. As Short roconsidered her position, her team fleshed out the case for both a bearish and bullish vicw on Whole Foods. Whole Foods positioned itself as "the leading retailer of natural and organic foods" and defined its mission as promoting "the vitality and well-being of all individuals by supplying the highest qualicy, most wholesome foods available. "16 The company's sole operating segment was its nanural and organic markets and nearly 97% of its revenues came from the United States. By 2013, the average Whole Foods store carricd 21,0(X) SKLs and approximately 30% of sales outside the bakery and prepared-food scgnents were organic. Whole Foods reported \$551 million in net income on \$12.9 billion in sales in 2013 , making it the clear leader of natural and organic grocers even though its numbers were still rather small compared to Kroger's net income of $1.5 billion on more than S98 billion in sales. 17 Facing increased competition in the segment, many analysts believed that Whole Foods' biggest challenge as "Whole Paycheck," and the company had historically opence its stores in high-income arcas. In response to conpetitive price matching and promotional sales, and laumched a printed value guide (The Whole Deal) that featured coupons, low-buxiget recipes, and other tips for price-conscious consumers. 12 Additionally, many Whole Foods supporters often pointed out that they were willing to pay a premium price for a premium product. The Research Report The recent collapse of Whole Foods' stock price had caught Short and her team flattionted. After all, heated conpetition in the grocery space was nothing new, even for Whole Foods, but the conmany had nonetheless
