Threats from new entrants are low in the grocery industry. There are significant barriers to entry in the grocery industry that prevent new entrants from taking market share from pre-existing giants, such as Kroger and Whole Foods. . Economies of scale prevail in this industry, forcing any potential competitor to overcome significant upfront costs in order to compete on price. Additionally, there are strong barriers to exit. Companies have significant investments in real estate, inventory and distribution channels that they are not willing to lose to exit the industry. Finally, local farmers are unlikely to gain significant strength in the industry, as many are unwilling or unable to invest in obtaining government certifications. Industry rivals compete on many fronts to differentiate themselves. Competitors in the grocery industry must compete on many aspects. , including price and inventory, to gain a competitive advantage. Many stores are following Whole Foods' lead and branching out into organic food markets. Whole Foods and Trader Joe's are at the forefront of this market, but stores like Kroger, Walmart and HarrisTeeter are adding organic aisles and increasing their natural product offerings. Companies also compete for food variety. Many companies attempt to bring together a variety of products from a multitude of cultures and climates to enhance the consumer experience. Finally, grocers compete on the strength of their brand. Consumers often have allegiance to a particular store, so companies must generate a large base of loyal customers. Trend toward healthier, more natural productsGrocery Store Analytics, p. 2 April 6, 2014Grocers obtain USDA organic certificates so they can enter...... middle of paper ......tif Summary Whole Foods has seen impressive revenue growth over the past 25 years, Whole Foods saw double-digit revenue growth. The company achieves this consistent revenue growth through its stable growth in its stores. This growth rate hovers around 14% each year, allowing Whole Foods to control rent expenses while expanding revenue opportunities. 4 April 6, 2014Rent Expenses and Profit Margins May Negatively Affect RevenueWhole Foods is currently experiencing declining profit margins year over year due to increased rent expenses and increased competition in the 'industry. Rent expenses have increased between 4% and 7% each year for the past four years. Additionally, profit margins have declined by 3% over the past four years due to negative pricing pressures in a competitive industry...