Free «Whole Foods Market's CSR» Essay Sample

The American supermarket chain Whole Foods Market resembled a wholesale food trading base 25 years ago. Its main customers at that time were fast-food companies and small establishments with a low average check. Over the years, the chain’s shares have demonstrated a steady growth. It has urbanized, opening supermarkets in new cities and conquering all original markets. Whole Foods Market is a chief seller of natural products in the United States. Over 25 years of its existence, it has managed to reach large sizes, attract millions of customers to its side in terms of nutrition and sustainable production, and, at the same time, manage to maintain a high level of service and a democratic business culture based on the involvement of staff in business processes. At the same time, the existence of such supermarkets, as well as their development, is popular not only in America but also throughout the world (Stone, 2015). The current paper states that to date, Whole Foods Market is one of the world’s largest companies in the retail trade of natural foods because its mission is to strictly select products, adhere to quality standards, and be dedicated to supporting agriculture. Therefore, the corporate social responsibility of Whole Foods Market was developed specifically to apply traditional technologies to growing crops and livestock, which contributes to the preservation of jobs and the environment.

History of the Creation and Development of Whole Foods Market’s Corporate Social Responsibility Policy

The history of the company traces back many years. It was formed by John Mackey and Mark Skiles in the year 1980 in the city of Austin ("Whole Food’s Market history," n.d.). Mackey, who is known for his extravagant habit of attending business meetings in a T-shirt, considers himself an innovator in the food industry. In 1980, he analyzed the US food market and revealed one feature: it was hard for ordinary Americans to find any simple natural food. Thus, the main unique feature of the shops of Whole Foods Market has always consisted in the fact that it specialized in healthy food and planned to compete with restaurants in every city in America. Throughout the existence of Whole Foods Market, it has been criticized and discussed that not everything that is sold in its stores is healthy, organic, and natural (Anguelovski, 2015). Despite this, the number of people wishing to visit the company’s supermarkets did not decrease, and the stores only gained their popularity among the population. At the same time, the strengthening of the market position of the Whole Foods Market has become a challenge for those who see the opportunity for the growth of supermarkets only in the increase of retail space and sales rather than in the increase of the range of services and the integration of new activities.

Therefore, the development of the company was determined by its uniqueness. Fresh vegetables and fruits without pesticides, the meat of animals that did not receive hormones, cheese without preservatives, and muesli without artificial sweeteners could be bought in the US market before the Whole Foods Market appeared. However, they were sold only in markets and small, specialized shops. Mackey decided to sell these products in supermarkets. His first store successfully worked for about a year, and then it was destroyed by the largest flood in the history of Austin ("Whole Food’s Market history," n.d.). The loss amount was $400 thousand ("Whole Food’s Market history," n.d.). Some customers were extremely fond of this store, so they even helped to restore it, and a month later, it opened its doors again to consumers.

Whole Foods Markets continued its expansion throughout the country, focusing on university cities where many educated and self-conscious consumers could be found. The network expanded rapidly through the purchase of independent stores and small networks specializing in natural food. The largest deal was made in 1996 when Whole Foods Market bought Fresh Fields with 22 stores on the East Coast and in Chicago ("Whole Food’s Market history," n.d.). The most unusual was the purchase of the wooden toys store Bread & Circus ("Whole Food’s Market history," n.d.). However, although the company no longer trades with this retailer, it retains the right to the name, which it uses if it is necessary to open a new store in places where there is already an independent outlet of Whole Foods Market. Moreover, Mackey bought not only sales outlets. It is worth noting that the increase in new categories of products, such as organic and natural ones, has created unique opportunities for every visitor (Huddleston, Whipple, Nye Mattick, Jung Lee, 2009). Overall, Whole Foods Market is, in its own way, the same pioneer as Dell, which once created a fundamentally new business model.

Development of the Company and Its Corporate Social Responsibility Policy

The corporate policy of Whole Foods Market is one of the factors contributing to the company’s success. It ensured, for example, a lower turnover of staff compared to other retail networks. The company encourages teamwork and the participation of ordinary employees in the process of managing stores. Workers are promoted depending on their personal contribution and not on the length of service (Deru, Doebber, & Hirsch, 2013). The policy of corporate social responsibility of Whole Foods Market was developed in such a way that it was convenient for people leading an active lifestyle. The company strives to maintain the image of the retail network of natural food products and trustworthy consumers. According to Whole Foods Market’s press releases, all products are subject to strict control, for example, fish are purchased only from fishing enterprises approved by the Council for the Management of Marine Resources, which is an independent international certification body.

Whole Foods Market has managed to build a large, prosperous, modern business structure. Once, it was a highly specialized company, whose staff was constantly scampering around the warehouse, looking for the right track with the goods. Later, they became real professionals in their business and learned to receive dividends not only from the sale of ecologically clean food products but also from the rational management of the company. In recent years, it has become fashionable in America to eat ‘differently’ (Deru et al., 2013). Moreover, a narrow niche, which was once designed for hippies and other alternative communities, is becoming a mainstream. Now, Whole Foods Market has to compete not only with the same specialized networks but also with traditional supermarkets that began selling organics. It should also be noted that Whole Foods Market has managed to turn the dreary walking around the shops in a pleasant process. Almost half of its retail space is occupied by a buffet restaurant with high-quality dishes, which is well suited for late breakfasts and lunches. At the same time, the owners of other supermarkets are losing market positions under the onslaught of a low-budget giant, Wal-Mart Stores Inc.

Over time, Whole Foods Market increased the number of its stores, becoming a huge international retail network of natural and organic products. In 2007, 195 stores in North America and the United Kingdom were opened (Huddleston et al., 2009). In addition to the fact that Whole Foods Market strives to guarantee that in each supermarket there are only fresh and natural products, the administration of supermarkets also follows the design, and each store has an ideal lighting system (Deru et al., 2013). A unique lighting system allows each visitor to evaluate a quality product, ensuring a special approach to the purchase of goods. Moreover, Whole Foods Market manages to increase sales, although many buyers at the cash register are shocked. Due to the high level of prices, it received another popular name, Whole Paycheck, which literally means ‘leave your salary.’

Current Position of the Company and the Policy of Corporate Social Responsibility

At present, the American company Whole Foods Market is the most dynamically developing food retail network in the United States. Mackey also launched a campaign to support local farmers; their products are marked with a special sign. Over the past year, stationary stores and online delivery of healthy food began multiplying with a great speed, promising to feed consumers with natural milk and meat or increase their vitality with the help of super-foods. The production of organic food is strictly certified, it can only include products during the production stages of which no chemicals, hormones, or genetic engineering were used. Whole Foods Market sells mostly organic food, although people can find traditional products like ketchup Heinz on its shelves. Currently, the company is on the second place in the list of the best supermarkets in America (Stone, 2015). The stores of this system focus on the promotion of natural products. Whole Foods Market guarantees that products sold in the supermarkets of the network do not contain artificial flavors, dyes, sweeteners, preservatives, or GMOs. To date, there is a modern policy of social responsibility in the company.

Mackey stresses that the company operates on the principle of ‘no secrets.’ This new business paradigm has the potential to improve the efficiency of the company, as well as the quality of life for billions of people. Each store has an account book that lists the salaries of all employees, including top managers. However, employees with clean lungs, normal cholesterol, and good health can have a discount of up to 30% (Tkaczyk, 2011). To get a job in a particular department, a beginner must pass a probationary period of 45 to 90 days. At the end, department employees vote whether the person should stay for work permanently. Since the company issues bonuses for the effectiveness of work, people vote for the employee who really improves the performance of the department.

In 2017, Amazon purchased a chain of organic food stores of Whole Foods Market for $ 13.7 billion. In strategic terms, Whole Foods Market can provide Amazon with a ready infrastructure that will ensure an organic pooling of channels and services while reducing financial risks. For clarity, one can simply imagine a scheme, in which Amazon bookstores are located in Whole Foods Market, and the Whole Foods Market button appears in the Amazon dash panel. Having Whole Foods Market as a subsidiary, Amazon is acquiring more opportunities to demonstrate a high value of services and technologies to large business representatives (Xu, Gao, & Hammond, 2017). This value guarantees tremendous benefits of Whole Foods Market in the industry, where profits are largely provided only through the absorption of other players and the pooling of resources. The retailer that was previously limited to the price range and did not find an opportunity to reduce the margin suddenly acquires the ability to change tactics and begin to develop directions that will help to make changes in customer experience and attract new loyal clients (Xu et al., 2017). The purchase by Amazon makes Whole Foods Market a company that is quite capable of catching up and overtaking such powerful market players as Walmart and Target. It should be noted that even nowadays, despite a large number of competitors, there are no super cheap stores in Whole Foods Market, and not everyone can afford to buy natural and healthy food in these supermarkets. That is why, Whole Foods Market is looking for new ways to the development and prosperity of its network, and one of the brightest examples is the cooperation with the Amazon Company.

Conclusion

Whole Foods Market was founded in 1980, and since then, the company has had some advantage over other food retailers, remaining almost the only US network that has focused on healthy organic food in the assortment matrix. One of the main victories of Whole Foods Market is that, thanks to its unprecedented growth and popularity, the company’s views on food and organic products have become an integral part of the economy and society. It should be noted that the company gains momentum every year and brings innovations to its corporate social responsibility policy. At the present stage, the American Internet retailer Amazon reaches an agreement on the purchase of a Whole Foods Market supermarket chain for $13.7 billion. The merger of the companies should maximize the profits of Whole Foods Market’s shareholders. The time would show the significance and impact of the merger of these two successful companies. Many consumers rely on healthy and environmentally friendly food; therefore, the North American Whole Foods Market is the ideal place for people. However, the severe competition from such supermarkets that have already reached the American market makes the development of the company difficult.