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Whole Foods a victim of their own success....stock drops 20% in one day

Title and article speak for itself.............

http://finance.yahoo.com/blogs/breako...

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  1. A very wise and very successful gentleman I used to work for would sometimes say "When you do something right, you draw a lot of flies."

    1. informal science project...

      but curious to hear others' views on how much lower prices for organic goods at Walmart and Safeway will impact WF. I know myself, you can't pay me to go shop at Walmart as its a miserable experience and my local Safeways have pretty mediocre produce as compared to WF. So for me, WF remains my go to place, unless there is too much of a price differential at SW.

      I'm just wondering how much real cannibalization there is between WM and WF and then SW and WF. I imagine more in the latter comparison, not as much in the former.

      6 Replies
      1. re: FattyDumplin

        The price difference will be a huge driver for a lot of things. If Walmart is significantly lower on organic milk and eggs along with a handful of key fruits and vegetables they'll pull a lot of business from everywhere including Whole Foods. informal indeed, but I know a fair number of people who have no problems shopping at Walmart but insist on organic for many of their food purchases especially for their kids. If they can save 20%+ on those groceries, they'll go to Walmart instead of Whole Foods.

        For my wife and me, with no kids, we shop a combination of Whole Foods, Trader Joe's and Fresh Market for various things. We haven't been in a Walmart in years and won't start but with just two people and the amount we eat the total savings on that stuff wouldn't add up that much so it's not a difficult decision for us.

        1. re: FattyDumplin

          We don't even have a Walmart nearby, not that I would go there anyway. I agree about the Safeway produce. However, Safeway has started to carry a number of brands that I could previously find only at WFM, including Amy's, BoltHouse, and so on. So if I happen to need to go to Safeway (sponges, Sabra Hummus, Hellman's mayo) I will pick these things up, too. I haven't noticed if they are cheaper there than at WFM.

          I won't shop at Walmart because it is the antithesis of fair trade. The only way those prices can be that low is buying super-cheap, which means huge pressure on the producers, which in turn means huge pressure on the workers.

          It is about more than just organic.

          1. re: Just Visiting

            at least based on these two responses, one should expect to see continued valuation normalization for WF versus other grocers.... that would mean there is a hell of trading opportunity here.

            i thought people would be more loyal to WF becuase their customer service is so good. i love that i can sample anything and return anything anytime no questions asked. and its justa much nice shopping environment. but so far, doesn't seem to be the case.

            1. re: FattyDumplin

              I agree with your first paragraph entirely.

              I also agree, mostly, with your notion that there will be some loyal customers. As much as I'm convinced that enough people will shift to other places for cheaper organics (because with lower prices at Walmart, other traditional grocery stores like Safeway and Kroger will have to lower their prices some, too which will also pull from Whole Foods) I do think there are plenty (and enough) people like you who value other things about Whole Foods and may not be primarily price driven that Whole Foods will continue to be profitable and successful.

          2. re: FattyDumplin

            I feel the same way, there is no way to get me to darken Walmart's door, and I have to believe the vast majority of WF shoppers feel the same.

            1. re: FattyDumplin

              although i don't buy all my organic food at whole foods, the stuff i do buy there i will continue to buy there.

              1) i use a lot of soy milk, and their 365 Brand of organic soy milk is the one that tastes best to me.

              2) the prices in their bulk department are extremely good and the department is always extremely clean and, most of all, i TRUST whole foods to REALLY stock organic food.

              3) their 365 brand of organic, vegan, mayo is the brand that i like

              4) my local whole foods will special order tofu for me from SAN DIEGO SOY DAIRY. that alone, would
              keep me at whole foods.

              5) the moral/ethical issues with Walmart are far worse than the moral/ethical issues with Whole Foods, imho.

              6) given the condition of so many of the walmart stores, i wouldn't want to rely on them not to cross contaminate the orgainic goods with the pesticide goods.

              7) when i want to save money on organic produce, i'll usually go to Sprouts. it's cleaner and closer

            2. Probably a good time to buy Whole Foods in this dip. Jerk out in a month or so.

              I live in Austin, and I remember when there were only two stores. If only I'd invested when they went IPO!

              5 Replies
              1. re: rudeboy

                I remember their first store, on Lamar, circa 1986, and I shopped there regularly. They have come a long way.

                1. re: Veggo

                  I used to bring my dog there and tie her up outside. There was a meat "cabinet" that had roasted lamb ribs, each side for a dollar. I'd come out, and all the nice people had water and sometimes food for her. I'd take her off to the outside tables and eat the meat off the bones. She would consume the rib bones entirely. She lived to 17, so I guess it was okay to let her eat the bones.

                  1. re: rudeboy

                    been a long day, but on my first read, i interpreted your post to mean you would take her outside and you would then eat the meat off the bones they gave her and give her the bones. which struck me as pretty funny :)

                  2. re: Veggo

                    Oh, and I think that there was a previous original location on Rio Grande or somewhere. Before I got to Austin.

                  3. re: rudeboy

                    It's funny because I've been to WF in 5 different states and the Austin locations are by far the worst I've been to. Don't even get me started on the "landmark" WF. That location is a complete nightmare to negotiate.

                  4. I shop at WF mainly for the variety they offer. Yes, other groceries in our area have an organic section but the pickin's aren't that great usually.

                    1. I see any increase in the availability and affordability of organic produce, sustainable seafood, and human organic dairy et al as positive.

                      The more support for organic farming and ethical sustainable practices is only a good thing if you ask me. Whole foods is a niche that will maintain a large segment of the organic market shopper/consumer, I'm not worried about them or the value of their stock.

                      5 Replies
                            1. re: coney with everything

                              I just had a baby - a human organic dairy is EXACTLY what I am! =)

                              1. re: aching

                                You could make a lot of money off that by selling at WF's! Funny, I know some "out-there" people who made a dish using pumped breast milk and had everyone over to eat it. While I'm a true CH, I did not......