Why Whole Foods Isn’t Worried About Rivals Selling More Organic Food

Posted: December 19, 2014 at 12:51 am


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NEW YORK (TheStreet) -- Grocer Whole Foods (WFM) has one message for rivals such as Target (TGT) , Walmart (WMT) and Kroger (KR) that are trying to sell more organic food to customers in 2015: Bring it on.

While its competitors have rapidly increased their sales and offerings of organic foods in the last year, Whole Foods co-CEO Walter Robbsaid in an interview with TheStreet that his company still holds a considerable edge. "A lot of our product is produced specifically for our standards, it's not like someone could go out and replicate us tomorrow," said Robb, who has held the top spot at Whole Foods along with founder John Mackeysince 2010. Whole Foods also plans to continue lowering prices on organic produce, open over a hundred fancier-looking stores and remodel many older locations. Must Read: How Clorox's New CEO Hopes to Wipe Away Competitors in 2015

Shares of Whole Foods are down 16.9% this year, mostly reflecting a plunge earlier in the year sparked by concerns of slowing comparable store sales growthand margin pressure borne from increased competition. But the stock has since recovered some 15% in the last six months, as Whole Foods has demonstrated to Wall Street its efforts to reignite sales through cheaper prices and store remodels are yielding results.

Discount retailers and traditional grocery stores have achieved impressive results in selling organics.

"We had double-digit percentage growth (sales) in natural organics, and if you go back to our Simple Truth brand, we'll hit a billion dollars this year," remarked Kroger senior vice president and CFO Mike Schlotman in an earnings call on Dec. 4. Kroger continues to add more organic food products in dairy and lunch meats. Walmart'swarehouse business Sam's Club is on a pace to double the number of organic foods it sells to members by the end of 2014. Recent introductions in the organic category have included chia seeds, breakfast bars and squeezable fruit pouches. Meanwhile, Target has brought a number of exclusive organic and natural items to its shelves in partnership with its suppliers, and new chairman and CEO Brian Cornell has hinted further news on the organic food front is coming in early 2015. Must Read: Macy's CEO: Big Things are in the Works

See the article here:
Why Whole Foods Isn't Worried About Rivals Selling More Organic Food

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Written by simmons |

December 19th, 2014 at 12:51 am

Posted in Organic Food




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