Whole Foods Market (WFM) has performed badly in 2014. Shares of the natural sustenance organization are down considerably this year. Whole Foods is confronting intense rivalry from several angles in the natural nourishment industry, and the organization's disappointing second-quarter results show that there is no respite going ahead.
Powerless performance
Albeit Whole Foods' sales increased 10% in the first quarter, its earnings were level. Because of the fact that Whole Foods trades at an expensive P/E degree of 25, a level earnings performance is disappointing. Furthermore, administration's standpoint was also concerning.
Whole Foods was before a pioneer in regular and natural foods, as a result of which investors esteemed it more than its peers. In any case, the organization's development pulled in consideration from rivals and made Whole Foods powerless against rivalry.
The opposition is intensifying
Presently, numerous mainstream retailers such as Kroger (KR), Safeway (SWY), The Fresh Market (TFM), and Wal-Mart (WMT) have entered this segment. Wal-Mart (WMT), for instance, as of late entered into an arrangement with Wild Oats to sell natural nourishment products at lower prices.
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Henceforth, the opposition in the natural foods market has increased, and Whole Foods is continuously compelled to make necessary moves to stay in front of peers. Whole Foods is venturing into low-income neighborhoods, smaller cities and suburbs. Remembering this, it as of late opened stores in West Des Moines, Detroit and Iowa, with one in the south side of Chicago expected one year from now. Prior, Whole Foods was focused on giving its products to the high-income class, and its prerogative drop down the income anchor will compel it to cut valuing, making pressure on the margins in the process.
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