Wall Street Journal financial columnist James B. Stewart gave Whole Foods what could fairly be called a rave review this week.
Excerpts:
“I generally have been a skeptic about Peter Lynch's much-quoted advice to invest in companies whose products or services you know and like. But after a few trips to Whole Foods a few years ago, I bought stock and have periodically recommended it. I invested in it because I admire the company and like that I am using my money to support it and earn a profit.”
“After my first visit, I was nearly in shock. The store was beautiful, well-lit and spotless. Employees went out of their way to smile, to offer advice, to direct you to items you were looking for. Lines moved with amazing speed. The quality and range of the merchandise was amazing. I haven't even mentioned the organic angle, which is Whole Foods' main calling card. There are plenty of messages around the store about sustainable coffee farming and local farm produce that make you feel well-fed and virtuous.
“But I suspect the main reason people shop at Whole Foods, and are willing to pay more for the experience, is that it is fun. The Whole Foods concept is pretty revolutionary. It is re-inventing food retailing, and might change agriculture. I think of it as a stealth Google, a company with huge potential but a small fraction of Google's hype. Like Google's founders, Whole Foods' top executives eschew the usual earnings predictions.
“Wall Street analysts tend to think of it as a supermarket chain, which is myopic. Whole Foods is competing not just with old-line supermarkets, but with restaurants, catering businesses, coffee chains such as Starbucks, and wine and beverage retailers. Whole Foods is becoming what the department store was in its heyday -- a destination, a meeting place, a community center.”
Excerpts:
“But I suspect the main reason people shop at Whole Foods, and are willing to pay more for the experience, is that it is fun. The Whole Foods concept is pretty revolutionary. It is re-inventing food retailing, and might change agriculture. I think of it as a stealth Google, a company with huge potential but a small fraction of Google's hype. Like Google's founders, Whole Foods' top executives eschew the usual earnings predictions.
- KC's View:
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To be sure, part of Whole Foods’ magic and appeal have to do with its niche in the marketplace. But the company management also has the right attitude.
We can’t help but wonder what the supermarket industry would look like if more executives showed that kind of leadership.
By the way, pay attention to Stewart’s comment that “Whole Foods' top executives eschew the usual earnings predictions.” That suggests that the company is paying more attention to the people who buy stuff in its stores than it does to people who buy shares of stock. Which is a good thing.
(By the way, a similar phrase will come up in another, less favorable context in our Krispy Kreme story...)
