Whole Foods Monopoly Analysis

Definition of a Monopoly

According to Principles of Microeconomics, a monopoly occurs when a firm ends up being the only provider of a good/service where there are no rivals due to difficulty in entering that same business. Once this happens, the firm has more control on the prices for its goods/services available to the public. The firm then has monopoly power as a price setter (Rittenberg, 2012). However, does this term of a firm being a monopoly apply to the Whole Foods Inc?

Does Whole Foods Fit the Criteria?

Whole foods sells a wide range of healthy foods and this specialized grocery chain has about 422 stores in the U.S. and United Kingdom (Whole Foods IP. L.P., n.d.). While the corporate owner's may claim to be the leading seller in

this particular product, Whole Foods does have some competition. This prevents the company from dominating the product prices for their brand. However, that does not stop some companies from trying to push the limit on prices. One franchise in New York appears in the news on July 1, the CEOs makes an apology statement to the public for overcharging on some of their products (Peterson, 2015). While Whole Foods may not be a monopoly in terms of economics, the business appears to try to be exercising monopoly powers with this stunt.
The Competition That Drives the Health Food Sales
In any case, there are plenty of options to choose from when it comes to healthy food products.

Some conventional supermarket or supercenters will have a few organic items to pick from, but the top contenders the company needs to worry about are: Wild Oats Market, Sprouts Farmers Market, and Fairway Market. Wild Oats Market still has some business deals to close before it can fully take on Whole Foods. At one time Wild Oats Market branches off of Whole Foods, but due to some circumstances the giant health food chain had to sell the branch. As for Sprouts Farmers Market, although small this company can help promote local fair and gain more popularity in that regard compared to Whole Foods. Lastly, Fairway Market another small health food grocery chain rapidly growing proves to be a potential competitor along with the other two (Tuttle, 2013). There are plenty of other local and well known brands that provide more choices for consumers to pick from. But, the three mentioned above are companies worth keeping an eye out for in the future especially if what they have to offer is a better offer than Whole

Foods.
Conclusion
In the end, Whole Foods has a large lead other many of the health food grocery chains. The brand is well known, but this does not give the company the right to try to monopolize their food product prices. People can compare the available products to other healthy food groceries if they have another chain nearby. As seen in a very recent news article on July 1, 2015, businesses will get caught in the long run. With the ever increasing spread of telecommunication and technology, more company secrets are coming to the surface. But, again according to Principles of Microeconomics, Whole Foods does not qualify as a monopoly for their specialized brand of products.

References

Peterson, H.

(2015). Whole Foods CEOs admit to charging customers too much - Yahoo Finance. Retrieved from http://finance.yahoo.com/news/whole-foods-ceos-admit-charging-205621561.html

Rittenberg, L. & Tregarthen, T. (2012). Principles of Microeconomics. San Francisco, CA: Flat World Knowledge, Inc.

Tuttle, B. (2013). The Next Whole Foods? Three Emerging Healthy Supermarket Challengers | TIME.com. Retrieved from http://business.time.com/2013/09/12/the-next-whole-foods-three-emerging-healthy-supermarket-challengers/

Whole Foods Market IP. L.P. (n.d.). Company Info | Whole Foods Market. Retrieved from

http://www.wholefoodsmarket.com/company-info