It has been a difficult year for organic grocer Whole Foods Market (NASDAQ:WFM). The stock has lost almost 17% of its value after the company lowered its guidance for fiscal 2014 in February. Whole Foods had missed sales forecasts amid rising competition from bigger grocers such as Kroger (NYSE:KR). Now, Wal-Mart's (NYSE:WMT) foray into this space could further pressurize Whole Foods' performance. However, Whole Foods is not lying down and is focusing on different strategies to improve its performance. But will it succeed? Let's find out.

Digging deeper
Whole Foods had lowered its same-store sale growth forecast to a range of 5.5% to 6.2% for fiscal 2014, down from the previous 5.5%-7% range. Revenue is expected to grow 11% to 12% for the full fiscal year. Whole Foods' reduction of the upper end of the forecast might look unimpressive, but the fact remains that the company's revenue is expected to grow at a faster rate this year. This can be attributed to the numerous moves that Whole Foods is making to increase sales, and also the expected growth in the organic foods market.

According to TechSci Research, the organic food market in the U.S. will grow at a compounded annual growth rate, or CAGR, of around 14% until 2018. Sales of organic fruits and vegetables, along with dairy products and packaged foods, will drive demand in this market.

Enhancing the customer experience
Considering the growth opportunity in the market, Whole Foods is focused on improving the customer experience and deliver a unified commerce platform to make shopping easier. In line with this philosophy, Whole Foods entered into a partnership with Square in February. Both companies will work together to make shopping faster and more convenient with new on-the-go purchasing options. 

Through this partnership, Whole Foods will be able to offer new payment and checkout features. These will allow customers to skip the main checkout lines, thereby reducing wait times for all customers. If customers are able to save time at its stores and they get what they want in a fast and efficient way, then Whole Foods could remain the go-to-grocer for organic food needs.

Expansion is key
Improving the customer experience is just one part of Whole Foods' strategy. The company is expanding at a good clip and announced the acquisition of seven Safeway locations in February this year. These locations will provide a much-needed breakthrough for Whole Foods in the greater Chicago area. Also, Whole Foods has a total of 19 existing stores in Chicago, and has another three stores under development.

At present, Whole Foods has around 373 stores in the U.S., Canada, and the U.K. By 2017, the company believes that it will be able to open its 500th store. In the long run, Whole Foods sees demand for approximately 1,200 Whole Foods in the U.S. alone.

Store expansion will be important for Whole Foods going forward since bigger peers such as Kroger and Wal-Mart are entering this space. Kroger is promoting its Simple Truth brand aggressively, citing that its organic products are free from 101 artificial ingredients. In addition, Kroger's supermarket brand King Soopers is trying to compete more directly with Whole Foods with its Fresh Fare concept.

Wal-Mart, on the other hand, has partnered with Wild Oats  to sell organic food items in its stores. Wal-Mart will offer different varieties of organic foods ranging from salsa and pasta sauce to quinoa and chicken broth. In addition, Wal-Mart also believes that customers will save 25% or more if they buy Wild Oats-branded products when compared to other organic labels. Wal-Mart has come to this conclusion based on price comparisons of 26 national brands. The big-box retailer is intent on bringing organic foods to the masses by looking to remove the premium that they carry.

What next?
In light of such competition, Whole Foods Market has lowered prices for key products such as flour, coffee, milk, and frozen pizza that are sold under its 365 Everyday Value brand. Also, the company is looking to expand the number of products sold under this brand in order to bolster its value offerings. Although price reductions might lead to margin pressure in the short run, Whole Foods will be able to keep its market share in good health as a result of its moves.

Combined with the company's store expansion initiatives and its efforts to deliver a superior shopping experience to customers, Whole Foods should be able to overcome its current issues in the long run. Also, considering that the stock trades at a forward P/E ratio of 25, and its projected annual earnings growth rate for the next five years is almost 17%, investors should definitely consider using the pullback in Whole Foods shares as a buying opportunity.

John Mackey, co-CEO of Whole Foods Market, is a member of The Motley Fool's board of directors. Amal Singh has no position in any stocks mentioned. The Motley Fool recommends Whole Foods Market. The Motley Fool owns shares of Whole Foods Market. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.