Whole Foods Stock Analysis – Should You Spend Your Whole Paycheck?

Whole Foods is a trendy grocery store that brands itself as healthy and high-quality, and the go-to choice of urban, high-income individuals who want to eat well. Groceries at Whole Foods is on the higher end of the price spectrum, and its patrons and non-patrons have endearingly nicknamed it “Whole Foods, Whole Paycheck”. Let us understand Whole Foods stock better with a Whole Foods stock analysis.

Fundamental Points - Who are they?

Austin, Texas-based Whole Foods (NASDAQ: WFM) is a high-end grocery store that offers a range of healthy and organic products for consumers who value these qualities. Whole Foods has over 400 stores in United States, and had a target of reaching 1200 stores across its various locations. However, in the first quarter of 2017, after a year of declining sales, Whole Foods decided to close nine stores, namely in California, Colorado, Chicago, New Mexico, Utah, Arizona, and Georgia.

On a brighter note, Whole Foods introduced an in-house brand concept store, 365 by Whole Foods. People who shop at Whole Foods regularly will notice that they have their own brand—365 by Whole Foods—that is significantly lower priced than the other brands they carry. A selling point of this new brand is that consumers do not have to sacrifice quality for cost. They also have great natural and organic options under this brand as well. Personally, I reach for staples like 365’s sugar and butter, and I really do think they are of terrific value and quality. The first wave of 365 stores are already opened across America, and more store openings are underway for 2017.

Who are their competitors?

Whole Foods most direct competitors are Phoenix, Arizona-based Sprouts Farmers Market (NASDAQ: SFM), and Monrovia, California-based Trader Joe’s, who also have a focus on more natural and organic products. Larger supermarkets like Cincinnati, Ohio-based Kroger, Gates, New York-based Wegmans, and American Falls, Idaho-based Safeway have  also started seeing opportunities in natural and organic goods.

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