Gourmet grocery store chain Whole Foods has been struggling since the recession hit as shoppers cut back on their indulgences and focused on more value-oriented stores.
Known for carrying locally grown and organic produce, the high-end and high margin merchandise isn’t flying off the shelves like it once was.
As a result the store has attempted to adjust its image, by lowering prices, increasing store brand offerings and providing more information about why their products stand apart.
The initiatives may have increased traffic, but whether they’ve given a boost to the bottom line remains to be seen.
What should you expect when Whole Foods reports on Tuesday?
Analysts polled by Thomson Financial expect the company to earn 19 cents per share on revenue of $1.86 billion for the quarter.
What’s the trade?
I’m short, reveals Karen Finerman. I think the valuation at 32 times is stretched. And when rival Safeway tried to enter the gourmet market they did extensive research and found customers are trading down.