The Stock of Whole Foods Market (Nasdaq: WMFI) jumped yesterday around 12%. In the last 12 months the stock gained more than 80%. The reason: The sales-growth of the biggest seller of organic and natural food products in the United States is accelerating.
The food chain reported yesterday that its sales climbed in the last quarter 9% compared with the year-earlier period. The company raised also its outlook for profits and revenue for the whole year.
These upscale food chain benefits from several trends:
- People are willing to spend more for things they consider as healthy.
- People are getting also more wealthy. Therefore they can afford to spend a higher percentage for things they like, the so called luxury goods. Thus Whole Foods should benefit above the average during the economic upswing.
- And: People are living longer, which expands the market for expensive health goods.
But: Investors should never forget the competition. Shopping chains like Wal-Mart, Kroger or Safeway are also in the market and want a big piece of the growing cake. And: The online giant Amazon.com is testing delivering fresh food in his hometown Seattle.
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