What is in this article?:
- Whole Foods is growing. Are you?
- Consumer confidence is rebounding, at least for some
If Whole Foods can return to strong sales growth in the midst of what continues to be a rather bleak economy, the belief is that the rest of the natural, organic and healthy products industry will be able to as well. What remains to be seen, however, is whether Whole Foods and other retailers can lure the non-core consumer back into the natural & organic fold in a truly meaningful way.
In a year when many food retailers have struggled to squeeze sales growth out of an environment dominated by soft pricing, Whole Foods Market has beaten analysts’ and its own expectations for revenue, profits and same-store sales growth.
For its 2010 fourth quarter, ended September 26, Whole Foods posted revenues of $2.1 billion on 15 percent growth. On a same-store basis, sales increased 8.7 percent, which surpassed the company’s anticipated growth range of 6.5 percent to 7.5 percent; the retailer’s gross profits climbed to nearly 35% of sales. Only growth in new Whole Foods stores has flagged of late, with the company opening just one store in Q4. On a brighter note, Whole Foods’ long-term plan calls for the opening of 15 new stores in 2011 and another 20 in 2012. The retailer closed out its 2010 fiscal year with $9 billion in sales and 301 stores in the United States, Canada and the United Kingdom.
“We attribute much of our success to the progress we have made in our relative price positioning and to our initiatives in areas such as healthy eating, animal welfare and sustainable seafood,” said Whole Foods co-CEO John Mackey in a statement. “These initiatives are aligned with our core customer base and reinforce our position as the authentic retailer of natural and organic foods.”
A particularly positive point for Whole Foods’ fourth quarter was its ability to balance sales growth with price cuts. The company reported an increase in customer basket size, as well as of branded products and higher-priced options in natural & organic food categories such as cheese and seafood.