WFM reminds me of Woolworth in the 70"s. I managed 2 Woolworth stores in the 70's, resigned in 1978 when the writing was on the wall and got a better job offer. Woolworth did a chapter 11 in 1994 and closed all Woolworth stores and used the money to open more Foot Lockers and Champs Sporting Goods, a good move.
Woolworth was the king of variety stores up til the 70's. But then gas stations, grocery stores, and drug stores started carrying more general merchandise. Add in Kmart's changing the retail landscape, and Woolworth tried a comparable Woolco that bombed. Walmart was not even on the radar then.
Fast forward to now and Kroger and other grocery stores getting into more organic, Aldi getting into organic and now Costco has surpassed WFM in Organic sales. Target is getting a bit healthier, Walmart customers can't either read or don't know what organic means. I shop at Costco and counted 15 orgainic items I buy monthly and Costco keeps adding more and is even getting into supplements like gingko biloba, that will cut further into WFM's sales.
What could WFM do? Open up super stores? Not enough product. Open up smaller stores or have stores within stores like the cell phone companies do? No way, the other stores are already doing it on their own.
WFM will be around for a while, but jbog I agree that it does not deserve a high multiple. I would not buy WFM or any other established health food company, too many new entries.
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