Whole Foods Market (NASDAQ: WFM), known for premium natural foods sold in more than 400 stores in North America and the U.K., has had a tough year. Increased competition from companies like The Kroger Co. and Wal-Mart has led to disappointing revenue and profit growth for Whole Foods.
Then, in the most recent quarter reported, the company was able to beat analyst expectations and show rising revenue and profits once again. Investors are wondering if this quarter is the start of the company's turnaround. Whole Foods CEO John Mackey said in the earnings release that "collectively, our efforts have led to extremely high team member morale, heightened brand visibility and positive sales momentum." Let's look at these three things and how they might help drive future growth.
1. Extremely high team member morale
Whole Foods has long made its mark in the U.S. workforce as a company that treats its employees better in terms of pay, benefits, and opportunity for advancement, all without any union involvement. "What makes us a successful company is our 80,000 team members who demonstrate their passion and dedication to the company's mission each and every day," Co-CEO Walter Robb says on the company's website.
The company's employee-focus seems to be working, as Whole Foods has consistently made Fortune Magazine's list of top places to work since 1998. And now it's this happy and motivated workforce that Mackey is saying will help his company to thrive long term.
Valuing employees and treating them well will be an important component in the company's new branding initiative under the mantra "Value Matters." With this culture and the new branding initiative, with its message of value for money and confidence in where food comes from, it will be important for Whole Foods employees to lead the way through interacting with customers.
2. Heightened brand visibility
Whole Foods has taken branding to a new level with its attempt to make a mass market grocery store appear not only local and natural, but also to show the company's core values.
Whole Foods is taking its branding further with its first national brand campaign, launched last month, to "highlight quality standards and core values of 'America’s Healthiest Grocery Store.' " The VP running this campaign, Jeannine D'Addario, said that "Whole Foods Market has been subtly telling our story for decades, and now is the time to overtly communicate what we've spent more than 35 years creating as change agents in the food world."
3. Positive sales momentum
The important question for investors now is: Are these employee-focused and brand awareness initiatives working? For the past few quarters, the company has posted lackluster numbers as it struggled to hold market share and same-store sales in the face of competition from other mainstream grocery chains that are also seeking to get in on the natural and organic food trend.
John Mackey, co-CEO of Whole Foods Market, is a member of The Motley Fool’s board of directors. Bradley Seth McNew 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.