While overall market opportunity remains huge, a lot of the challenge has to do with the fact that, notwithstanding some terrific management, Whole Foods might have too many balls in the air.
The chain postponed or canceled the opening of a store in Boise, Idaho, has yet to open in Orange, Connecticut, and a second location in Mill Valley, California, leased a year ago, is at a standstill. Closer to NBN’s home, a couple of recent mid-week visits to the Westport store, which we previously gave rave reviews, showed a meat case that was half empty and merchandised quite poorly, the exact opposite impression we had gotten from several weekend visits. Not shocking for most stores, but for a Whole Foods, it stopped us in our tracks.
A recent story in the Marin Independent Journal on the delay in Mill Valley, California (that beautiful wealthy town north of San Francisco) questioned if Whole Foods leased the former Albertson’s location as a defensive move to prevent Trader Joe’s from entering that lucrative market.
In the meantime, we wouldn’t be worried about the long term trajectory for Whole Foods. Not only do they have some of the smartest folks in supermarket management leading their teams, but their second greatest asset is the sorry way most U.S. supermarkets are run. See our inelegantly titled story about America’s mostly lousy supermarkets here.
As to whether Whole Foods is off track on its expansion, we don’t know, but NBN believes even with delays, opportunities for Whole Foods will continue to be strong, even if the current evidence might suggest that they can’t quite keep up with demand.
If that’s the case, what a lucky problem to have. Plus, with over $6.6 billion in 2007 sales and 270 stores, slow growth might be the best way to blossom. Unless of course you’re worried about losing the love of Wall Street’s analysts.
Stay tuned. Whole Foods earning call is coming up May 13th and we’ll update you then.