Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

SUPERVALU INC. (SVU), Safeway Inc. (SWY): Whole Foods Market, Inc. (WFM)’ Impressive Growth Looks Set to Continue

Page 1 of 2

Whole Foods Market, Inc. (NASDAQ:WFM) had a strong third quarter, yet again outperforming its peers SUPERVALU INC. (NYSE:SVU) and Safeway Inc. (NYSE:SWY). Whole Foods has been on a good run, and a look at its metrics over the last five years clearly proves that:

WFM Revenue TTM Chart

WFM Revenue TTM data by YCharts

Whole Foods Market, Inc. (NASDAQ:WFM) is operating in a market where growth is driven by consumer trends toward healthier living. With an aging, affluent, and health-conscious population moving toward the concept of organic and natural food for healthier living, Whole Foods certainly has some tailwinds.

Whole Foods Market, Inc. (NASDAQ:WFM)What next?

The global food retail market is estimated to grow at a compound annual growth rate of 5.5%  for the period 2011-2016, reaching a market size of approximately $7 trillion by the end of 2016. In comparison, the global organic food market is expected to grow at an estimated CAGR of 12.9%, and is expected to be worth $104.7 billion in 2015.

So, even by conservative estimates, the organic food market would still be a minuscule 1.5% of the entire food retail market by the end of 2016 if these growth projections are correct. This leaves a huge potential for growth.

Whole Foods Market, Inc. (NASDAQ:WFM) is also working to shed its image of being only for affluent shoppers. Stores are opening up in lower-income areas and in smaller markets, ranging from 20,000 square feet to 70,000 square feet in size.

It has announced plans to build an 18,000 sq ft store in Englewood, one of Chicago’s most impoverished neighborhoods. This store will be operational in 2016. If its low-cost stores manage to do well, we can expect to see Whole Foods Market, Inc. (NASDAQ:WFM) stores in many of the under-served communities in the rest of the country.

The company’s sales strategies also include “flash” sales on specific items promoted on social media that run for a few hours, like a five-hour sale on ice cream, where customers can buy one item and get one free. Customers can also expect to see more one-day sales on specific items.

Money-saving tips using coupons and via information on its website have also been offered to shoppers. The discounts have not had much of an impact on gross margins, which have held steady at around 36.6%, 60 basis points higher than the same quarter a year ago.

Looking around

Safeway Inc. (NYSE:SWY), the second largest grocer in the country after Kroger, is relying on multi-pronged strategies like implementing loyalty programs and investing in new or replacement stores to push up sales going forward. “Just for U” has been reported to be a success: It is estimated that this loyalty program could end up with over 6 million members. These customers are frequent visitors to stores, and about 50% of its top-line is being attributed to this category of shoppers.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

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 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!