Breaking up is hard to do: Measuring the Whole Foods fallout
Today's Financial News - Posted August 19, 2009
Is a blissful relationship coming to an end? After its CEO spoke his mind, Whole Foods’ customers are staging a boycott. Will it be enough to stop the stock’s triple-digit rally?
By Andrew Snyder, TodaysFinancialNews.com
Baltimore – (TFN): If there is one thing we have learned from the recent healthcare “debate” it is we should not tell liberals something they don’t want to hear. It really makes them mad as they take it all so personally.
For guys like John Mackey, the chief of Whole Foods Markets (NASDAQ:WFMI), you would think this is a lesson that would have been engrained a long time ago. After all, the natural-foods store is a Mecca to any left-leaning shopper with an oversized egg budget.
The feel-good crowd is revolting against the store’s leader after reading an opinion piece by Mackey in the Wall Street Journal over the weekend. The CEO’s stance went against what many of the stores customers are busy fighting for, more government control of the nation’s healthcare sector.
Now tens of thousands of former Whole Foods shoppers are boycotting the stores (or at least telling their Facebook friends they are.)
There are two surprising elements to this story.
First, how in the world did a liberal get a copy of the Wall Street Journal? My only guess is that maybe one of them saw the headline as he was separating recyclables over the weekend.
I cannot blame Mackey for thinking he would get away with his comments. Who could have thought a pro-government reformist would have ventured into the world of numbers and figures? Talk about bad a stroke of bad luck.
Second, I am surprised how quickly the company’s core demographic has turned on the company. After years of making shoppers feel good about their free-trade coffee purchases and organic soy milk, one diverging opinion that contained true and proven ways to lower everybody’s healthcare costs caused a sudden mutiny.
But I thought we were “soy” mates
It is starting to appear like this whole healthcare debate has nothing to do with saving any American lives or money, but is becoming a war of ideologies.
The Right cannot stand to see a super-majority get something accomplished in Washington (We never even declared war). And the Left foams at the mouth the second anybody even starts to challenge its majority.
Sorry but, “We won in November, so stop talking” is not a persuasive argument for anything but “change” come the next election cycle.
Before I get in trouble again for being too political, let’s get down to how all of this is going to affect Whole Foods investors.
The bottom line is there are bigger problems to worry about. For a company dealing with the wealth-destroying nature of a nasty recession and a consumer base that is unwilling to open its wallets, a “grassroots” boycott is like running over a tiny field mouse on the climb to the top of Pikes Peak.
You may swerve to miss it, but if your attempt fails it really isn’t going to slow you down as you tackle the hills and curves of the mountain in front of you.
Shares of Whole Foods have been making strong forward progress since last winter, increasing in value by nearly 300%. A half-assed boycott is going to send shares back to $7.00 before the public relations team puts a bandage on the situation.
If anything, all of this boycott news is going to give the company another shot at strengthening its brand awareness and corporate message.
Remember, there is no such thing as bad publicity, especially when you are selling overpriced eggs.
Whole Foods will continue to do what it does best: get the attention of the folks that aren’t paying attention.
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August 19th, 2009 at 1:26 pm
An unbelievable article about Whole Foods Markets. I can’t believe the mentality of its customers protesting what Mackey wrote in the WSJ. Maybe it describes the problem this country has. If this country’s population doesn’t wake up…there’s a good chance we will no longer be what we were in the past. Talk about STUPID.
Stupid is as Stupis does.