Inside This Issue - News
Whole Foods eyes new store blitz
July 11th, 2011
NANTUCKET, Mass. – Whole Foods Market Inc. can have 1,000 stores in the United States, more than tripling its current number, co-chief executive officer Walter Robb said last month.
The collapse of the commercial real estate market has created growth opportunities, and the natural and organic grocer has identified sites where it “can put some bets down and take advantage of that,” Robb said at the Jefferies Group Inc. 2011 Global Consumer Conference here.
However, if the economy slumps severely, the retailer can escape from leases, he added.
"We have some contingency plans so that if we needed to, we could slow down," Robb explained, noting that Whole Foods now has exit and buyout clauses with landlords.
He added that the chain expects to elaborate on its expansion plans during its next quarterly earnings call.
The company’s stock price rose sharply following Robb’s comments and an analyst’s upgrade. BMO Capital analyst Karen Short lifted the rating on Whole Foods stock to “outperform,” saying a sell-off of shares and positive economic trends augured well for the chain. Its share price had fallen more than 16% between April 1 and late June.
But Whole Foods’ sales and profits have increased for more than a year, and it is turning in better results than other supermarketers. Having rebounded after the recession, the retailer seems to have the capability to “innovate, evolve and differentiate itself” to serve the growing number of health-conscious and educated consumers who are willing to spend extra to meet their needs, Short said.
Robb said the company, which is picking up market share, is now free of debt and is producing significant free cash flow. The supermarketer intends to use some of its cash to ramp up store openings.