Samira Ghaffari Shannon Kennedy Josh McGuire Paul Maurer

1. Samira GhaffariShannon KennedyJosh McGuirePaul Maurer

2. Company Overview • CEO John Mackey • Founded September 20, 1980 in Austin, Texas • Founders: John Mackey, Renee Lawson, Craig Weller, Mark Skiles • Merged Safeway and Clarksville Natural Grocerer • Began expansion in 1984 (Houston, Dallas, New Orleans)

3. 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 Company Overview - Acquisitions

4. International Expansion • 2002 moved into Canada • 2004 expanded into the United Kingdom • 299 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

5. Employment Overview • 47,478 U.S. Employees • 1,901 Outside U.S. Employees • Salaried: Associate Store Team Leader ($68,405) • Hourly: Prep Food Service Team Member ($23,337) • 4,287 jobs lost in 2010, 9% job decline • 617,696 applicants for 1,160 job openings • Non-Union • All stores are company owned

6. Sales by Product Types

7. Corporate Strategy- Growth Strategy • External growth strategy • Increase of stores • Differentiation through customer satisfaction • Measurements of performance • “Green” initiative

8. Store Growth

9. Differentiation • Aims to make customers their first priority and satisfy their needs *http://www.wholefoodsmarket.com/company/corevalues.php

10. Evidence of Customer Satisfaction

11. Performance Measurements

12. 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 Competitive Advantage – “Green Mission” http://sec.gov/Archives/edgar/data/865436/000110465910059917/a10-19737_110k.htm

13. 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 “Green Mission” Achievements http://sec.gov/Archives/edgar/data/865436/000110465910059917/a10-19737_110k.htm

14. Figure 1: (Historical ACSI Scores)

15. HR Professionals

16. 2010 Financial Statistics* *For fiscal year ended 9/26/2010

17. Comparative Financial Statistics* *For fiscal year ended 1/1/2011

18. 5 year stock performance

19. 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

20. Ranking All-Star Ranking Store Level Employees are rewarded at an all-star: top sales in country, top sales in region Whole Foods employees feel motivated when they receive public acknowledgment Money is not the only motivator

21. “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

22. 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

23. Overall Performance & Feedback Whole Foods hold leaders to high standards Once a year managers sit down with leaders and go over job expectations and responsibilities Opportunity 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

24. Strengths of Whole Foods • Selection rate: .18% • Compressed workweek • Telecommunicating • Reward 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

25. 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 jobs • No paid leave • No onsite childcare

26. Future of Whole Foods - Opportunities • Increasing demand for organic products • Increasing popularity of private labels will improve margins • Rising popularity of online retailing

27. 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

28. Keys to Whole Foods Past & Future Success • Expand global market • Culture sets them apart. Need to maintain current culture and continue to improve based on employee surveys and feedback • Stay customer focused • Continue 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

29. 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.