The Five Dumbest Things on Wall Street

Wholly Unappetizing Foods

Just for fun, let's count the calamities at Whole Foods(WMFI Quote) within the past week or so.

Ready? Last Friday, the upscale grocer announced a recall for fresh ground beef after federal officials linked 31 cases of E.coli poisoning to one of its suppliers. Whole Foods says it will provide store refunds on the bungled beef sold this summer in several states and Canada.

Several retailers have become embroiled in the E. coli mishap over the past several months, but the name "Whole Foods" somehow implies an immunity to such vagaries as bacteria. Isn't that one of the reasons Whole Foods charges so much for its wares?

This setback was preceded by Whole Foods' earnings announcement two weeks ago. In case you missed it, here's a quick recap: Whole Foods' profit dropped 30%, causing shares to plunge to a 52-week low. Also cut: Whole Food's dividend, earnings outlook and the number of new stores the company plans to open next year.

CEO John Mackey blamed the earnings shortfall on the tough economy. However, judging from the impressive quarterly results at retailer Ralph Lauren (RL Quote), the Polo set still has discretionary dollars to spend. Unfortunately for Whole Foods, those consumers are being more discrete in where they spend them.

One thing about rich people: Most generally needed at least a modicum of brains to stock their bank accounts. And it does not take a brain surgeon to figure out that you can buy ground beef -- minus the bacteria -- for a whole lot less at Safeway (SWY Quote) or Kroger(KR Quote).

For its part, Whole Foods says it is trying to ease the price pains of its shoppers. The company launched its "Whole Deal" newsletter in July, complete with recipes and tips on how to "feed a family first rate food for less."

Looking at Whole Foods' earnings, it appears that consumers have already figured that one out. They're shopping somewhere else.

-- by Gregg Greenberg

Dumb-o-meter score: 80. Where's the beef? you ask. Certainly not at Whole Foods.