The Mecca of organic moms, vegans and folks who read the ingredients on packaged foods is facing increased competition from the likes of Walmart (WMT), Trader Joe's and The Fresh Market (TFM - Get Report), among others. And most investors on StockTwits.com believe all the vying for healthy eaters is destined to take a bite out of prices and earnings.
Whole Foods fell more than 1.8% by 3 p.m. Sentiment on the stock is 64% bearish, according to StockTwits' analytics.
In a statement this week, Walmart said that it would bring "everyday low prices" to its organic products. "As part of our strategy of being relevant to customers, we want them to know that we have these products, and that we have them at prices that are better than those offered by the competition," the company said. "In organic food products, as in all of our categories, our aim is to bring customers everyday low prices, and to offer them the best prices in the marketplace on those products." The fighting words from Walmart, which is known to take losses on some products in order to gain market share, sent Whole Foods through its 200-day moving average. Some investors said that Whole Foods' $48 stock didn't have support for another few dollars and called for further declines.
$WFM - The stock is very weak and lots o compaies doing the same thing now. If it breaks $48.50 by end of day Monday we go to $43.85 -- Todd Spigel (@tspigel) Apr. 13 at 08:16 PM
$WFM short yesterday. Increasing competition in organic food, poor charts. Thanks to @RiskReversal for first pointing it out back in Feb. -- Matt Schoner (@ms82494) Apr. 15 at 12:41 PMBullish investors said that shoppers would still flock to the store, regardless of cheaper alternatives. Health-conscious consumers are more likely to trust Whole Foods to deliver on non-genetically modified, raw, healthy foods than a mega-retailer known for selling inexpensive goods manufactured in China.