More Proof Politics and Business Don’t Mix: Whole Foods Market, Inc. (WFM) and More

Page 1 of 2

If you’re selling to one side of the political divide, don’t get too loud on behalf of the other, or Foolish investors may have to sell your stock.

With Americans divided politically as seldom before, it just makes business sense to keep your head down. It’s tempting to speak out loudly on the issues of the day, especially those impacting your bottom line. But do it carefully.

Whole Foods Market, Inc. (NASDAQ:WFM)

The best example of how not to do this is Whole Foods Market, Inc. (NASDAQ:WFM). The company caters to upscale, socially conscious consumers, who tend to vote Democratic. But its co-CEO and founder, John Mackey, loudly proclaims himself a libertarian and tends to support Republican causes.

Whole Foods Market, Inc. (NASDAQ:WFM)Not that there’s anything wrong with that, as Seinfeld said. And Mackey’s company was not badly hurt by his 2010 profile in The New Yorker, where he loudly proclaimed political ideas in direct variance to those of his customer base. Since that profile ran, in fact, WFM has doubled in value.

But as health reform has kicked in, Mackey has been taking it up a notch. He called it socialism, then fascism. He also claimed he would cut workers’ hours in response to the law, denying them the 30 hours work necessary to get coverage under the law.

For a guy who calls himself “daddy” to his workers, and his workers “team members,” this may have been too much for some shoppers. Shares tanked after earnings fell recently. The Motley Fool’s Blake Bos suggests that WFM is now a buy, but I question that.

Mackey himself has always been shocked at how few competitors have copied his act, which consists of charging premium prices for premium goods, and bragging about it. Well, privately held HEB finally has, and in his home market of Texas, under the name Central Market. Nine such stores are now open. Mackey’s shoppers are getting alternatives, and are starting, slowly, to vote with their feet.

Darden Restaurants, Inc. (NYSE:DRI)

Like many other companies in the service industries, Darden Restaurants, Inc. (NYSE:DRI) – owners of Red Lobster, Olive Garden, and other mid-scale restaurants – saw an opportunity to limit costs in the health care law.

The company, rather loudly, said it was experimenting with turning its 45,000 employees into part-timers, specifically to evade the law’s requirements. Worker groups have begun picketing the restaurants even though the company has publicly backed away from its plans.

But damage is being done. The company lowered guidance in December, and the stock promptly fell out of bed, falling almost 20% in a matter of weeks, despite the maintenance of a handsome 20 cent/share dividend.

It may well be that companies like Darden, which hire a lot of low-skill workers, will face higher costs due to health reform, the minimum wage, and other measures. Higher costs put pressure on margins, regardless of a store’s politics. But it’s one thing to lobby privately, another for a CEO to lobby publicly. And lobbying publicly against the interests of your workers can leave scars on investors, not just management.

Wal-Mart Stores, Inc. (NYSE:WMT) vs. Costco Wholesale Corporation (NASDAQ:COST)

Wal-Mart Stores, Inc. (NYSE:WMT), where founder Sam Walton started the drive to call workers “associates,” making many of those early workers into millionaires through purchase of company stock, is now ground zero in the American labor movement.

The company has been very loud in opposing organization of its workers, and on the surface has paid no price for it. Other than to make its stock a bargain.

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Click here to Read Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 74 percentage points in 2.5 years. Our beta is only 1.2 (download a FREE newsletter and see the details inside)

Lists

Best Selling Magazines in the World

Shortest People in History

The Most Celebrated Holidays in the World

Most Expensive Handbag Brands in the World

Top Selling Comic Book Issues of this Century

The Most Powerful Women in Politics

Best Paid DJs

Most Rebellious Female Artists

Best Paid TV Actresses of 2014

Best Paid Actors of 2014

Most Expensive Horses in the World

Tallest People Ever

Most Encouraging Feminist Celebrities

Best Paid Supermodels of 2014

Top 10 Suburbs for Retirement in 2015

10 Wealthiest Cities in America

Top 10 TED Talks for Entrepreneurs

Best TED Talks on Education

25 Most Dangerous Places to Live in America

Top 10 Ski Resorts in the United States – 2014 List

Top 10 Most Remote Places in the World

Most Visited Museums in the United States

Wealthiest Photographers in the World

Most Famous Gay Athletes

The World’s Most Famous Circuses

Best Hair Stylists

Most Popular NASCAR Drivers

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!