Rising Food Prices Look Manageable: Whole Foods Co-CEO
Food inflation is going to pick up next year, but Whole Foodsshould manage it easily, the upscale grocer’s co-CEO told CNBC’s “Closing Bell” on Tuesday.
“I think we see inflation of 2 percent through the end of the year and 3 to 4 percent in 2013,” Walter Robb said. While the last 18 months have been disinflationary, “it’s just this recent news and the concern in the Midwest with the drought that has raised the likelihood of food inflation,” he said.
Whole Foods won’t see much impact from higher costs in the near-term, he said. “There’s a lag time of six to nine months between when price increases come at the farm and when they land with consumer goods," he said. (Read More: Massive US Drought Leads to Worst Fears for Corn Crop)
“I think you’re going to see a move up in inflation in 2013, but it looks manageable,” Robb said.
The grocery chain also sees little reason to scale back its growth plans, despite a shaky U.S. economy. Whole Foods plans to open 28 to 32 stores next year and 33 to 38 others stores in 2014.
“We’re betting demand for fresh, healthy foods is larger than this current economic cycle,” Robb said.
While the looming “fiscal cliff” — when a host of tax cuts expire and automatic spending cuts take effect — has made Whole Foods keep a little more cash on hand as a cushion, Robb still has a fundamental belief in the health and growth of the business.
“Growth is strong right now, and we’re just optimistic about our future even through some of these things are definitely concerns out there in the larger macro environment,” he said.
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