Hmmm…have you heard about this? Whole Foods stock shot up 5% last Thursday (and again on Friday) based on chit chat that Kroger might want to buy the organic grocery store.
Apparently, Whole Foods is having some issues, issues which mostly stem from bad press about their high prices. I trust you’ve heard the phrase, “Whole Paycheck”, in reference to the grocery store? And then there was the segment on John Oliver’s “Last Week Tonight” that mocked Whole Foods. Here’s the clip:
https://www.youtube.com/watch?v=R9gGL1cnnhg
Consumers aren’t sticking around as much either- not even Millennials; same-store sales, which measure how well stores open at least a year are doing, have fallen for the past four quarters and analysts expect another 2.1% drop this quarter as well.
With their stock down more than 10% this year (shares fell in 2014 and 2015), which is more than 50% below their all-time high from 2013, they have to stop the hemorrhaging somehow. So, the acquisition by Kroger would be good; in the last couple of years it’s been aggressively acquiring regional chains, most recently picking up Roundy’s, which has hundreds of stores in Wisconsin and Illinois. But then and again, they already have their own organic business.
While speculation continues, spokespeople at Kroger and Whole Foods both declined to comment.
Source: WLS AM
