Next Trader Joe's Executive Summary

Kroger is using cost-based strategy to sell organic products as according to their Executive Vice President Mike Donnelly, their customers are not ready at the moment to pay higher prices for organic products so they target to sell organic products at a price closer to traditional foods and they are happy with small/no margins at the moment (Kowitt, 2015). Kroger is one of the most analytics’ supermarket chains as they are targeting the future because organic grocery products market is expected to grow by 2018 (Forbes, 2015). In the 2014 fiscal year Kroger’s total sales, total sales revenue was $108b and $11b was contributed by organic products whereas Whole foods sales revenue was $14b (Forbes, 2015).

Next Trader Joe’s is also a well positioned rival for Whole foods. They have 461 stores and revenue was $8.63b in 2015 and expected to grow by 2.5% in future years (Business Insider, 2016). Trader Joe’s is voted as the most favourite grocery stores for consecutive three years (Cheng, 2015). They adopted an aggressive expansion plan as they opened 38 new stores only in 2015 (Forbes, 2015). Trader Joe’s imports about 20 to 25 percent of its products, whereas the rest of the products are sold by their own brand name and customers cannot buy these goods under any other roof (Thompson, C-36) there prices are much

According to their management, they believe that the Sprouts farmers market is a fast growing differentiated retailer of natural and organic food (Thompson, C-37). The table below clearly illustrates that Sprouts market is continuously growing its sales revenue for the past few years. Only in 2011, they had a net loss because that year there operating cost went up unexpectedly, but Sprouts farmers market very quickly realized that organic food market is very competitive and they had to be very careful with expenses (Marketwatch,