Whole Foods Market: The Deutsche Bank Report Harvard Case Solution & Analysis

Whole Foods Market: The Deutsche Bank Report Case Study Analysis

Other than natural and organic products, prepared foods were also being offered at the stores to assist consumers who do not cook their own meals on regular basis. Similarly, the offering of private-label products and genetically-modified products at relatively low price tend to have great influence over the margins. Furthermore, extended network of stores requires efficient supply chain management particularly for perishable goods. Organizations in the grocery industry have been bringing an improvement in the usage of technological approach to have an efficient management of inventories at the retailing stores.


Among many of the leading players in the grocery market, the top competitors of Whole Foods include Wal-Mart and Kroger. In the year 2014, Wal-Mart was known to be largest food retailer in the United States with approximately 25 percent market share. Whereas Kroger was the leading conventional grocer with 4.5 percent EBIDTA margin. As compared to Whole Foods, Kroger and Wal-Mart offered organic products at low-price by targeting health-conscious customers.In the year 2012, the revenue growth of all Wal-Mart, Kroger, and Whole Foods was $145 billion, $96.3 billion, and $11.7 billion.

Unlike Wal-Mart and Kroger; the growth of Whole Foods was followed by zero debt approach as compared to $11,311 million debt of Kroger and  $55,245 million debt of  Wal-Mart, according to the financial data of the year 2013. Similarly, the same-store sales growth of all the three grocers (Whole Foods, Kroger, and Wal-Mart) were estimated to be around 7.0 percent, 3.6 percent, and (0.5) percentin the year 2013.In terms of store growth, Wal-Mart had 4835 stores, Kroger had 2640 stores, and Whole Foods had 362 stores.

Current Market Position

Whole Foods is positioned as the market leader for natural and organic product sales in the grocery market. For the maintenance of the market position and to defend the misrepresentative claims, the organization introduced a rating system to rate the products based on freshness, sustainability and other related factors.This was primarily to ensure the quality of products offered to customers. Premium pricing serve as a competitive advantage for Whole Foods in highly competitive market. Similarly, Whole Foods has been making increased investments to bring improvement in the consumers’ experience, shorten the waiting times by introducing self-check-in systems. Additionally, Whole Foods has been represented with the opportunity to bring reduction in the operating expense against the pricing pressures from revenue growth.


Considering the significant sales and store growth of Whole Foods; the organization represents the capability to demonstratean increase in the revenue’s growth in future. Similarly, the share price of Whole Foods is under-valued based on the value of price shared by Karen Short i.e. $60. However, the share price calculated by DCF, EBIDTA Multiple and its blend represents higher share price value that is around $100,except the share price value given by EBIDTA Multiple i.e. 41. Additionally, the share price value was given high weighted average to EBIDTA Multiple i.e. 60 percent. Based on such considerations; the investors are recommended to purchase the shares of Whole Foods at the rate of $60 per share as they represent the potential of bringing significant increase in the company’s profit generation in future.


Whole Foods has been a leader in the natural and organic grocery market,and has demonstrated an exceptionally good performance in the worst financial conditions. The financial growth of the organization has been significant over the period of time, and is expected to have further improvementwith time. Due to this reason, the under-valued sharescan be purchased by the investors,because the company demonstrates the potential of having significant growth............................


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