US retail commentators believe the presence of organic and natural brands on mainstream supermarket shelves could be slowing growth at Whole Foods Market.
Whole Foods shares tumbled 19% earlier this month after the US natural food retailer reported quarterly earnings that missed analysts’ expectations.
While second quarter revenue was up by 10% on the same period last year at $3.3 billion, same store sales growth was 4.5%, a marked slowdown on the 6.9% growth a year ago.
In its commentary, CNNMoney noted that while health food as a category is booming in the US, “Whole Foods is no longer the only grocery chain catering to the specific needs of elite foodies and yoga moms – consumers are looking for tofu and granola at a better price”. And with giant food retailers Walmart and Target increasingly moving into the natural and organic markert, says CNNMoney, they may be finding those better prices.
But Whole Foods is optimistic about the future. CEO, John Mackey, said: “The rapidly growing demand for fresh, healthy foods affirms our mission for the last 36 years and highlights the increasing growth opportunity ahead of us.” He added that he expected sales “to approach $25 billion over the next five years”.
