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May 13, 2007
Trouble at Whole Foods
Former Austin resident Joe Weisenthal over at DealBreaker sums up this Street.com analysis of the continuing financial performance troubles of Austin-based Whole Foods:
Being from Austin, it's a little painful to see cracks in a homegrown success story like Whole Food success story (Dell has been painful enough). Then again, every company has to get its comeuppance, which is what the company is now in the process of receiving. Sure, it continues to open new stores, and apparently the one on Houston even has a sushi conveyor belt, although we haven't been able to verify that first hand. But everyone sells sushi now, and everyone sells organic foods. Basically, a Whole Foods store isn't unique like it used to be, and the company is feeling the pain. Plus, the high-end grocery space is getting more crowded. In the east, there's Wegmans, which ostensibly makes Whole Foods look like an Albertsons. And then supposedly there's a chain called Eataly, coming from Italy, which will make Whole Foods look like your little Korean grocer down the street. So it's finally getting tested, something its investors aren't used to.
Whole Foods shares dropped more than 10 percent Thursday, closing at a 2 1/2-year low of $41.15. That Texas grocery store competition remains absolutely brutal.
Posted by Tom at May 13, 2007 4:01 AM
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