Whole Foods will not go gently into that Good Night

Yesterday morning, I got to Whole Foods early. I like to get there just as they open so I don’t have to maneuver around the droves of weekend shoppers that typically overrun the place by 10:00.

I also like getting first shot at the produce before its picked over by what often look like ravenous vultures that haven’t been fed in days.

This week, strawberries and raspberries were on sale, so I doubled up. The organic peaches smelled exquisite, so I secured about a half dozen of those, too. I didn’t buy much in the way of vegetables as our local farmers’ market is now overwhelmed with delicious, local, organic veggies. Beets, kale, collards, cauliflower, squash. I’m telling you, this time of year is like Christmas for me.

Of course, as much as I love our farmers’ market, there are just certain things for which I always rely on Whole Foods. Cereal, rice, bread, yogurt, pasta and milk. The milk is actually from a local dairy, but I’m able to pick up my weekly supply at Whole Foods, thereby making it much easier than traveling 40 minutes out to the farm.

That’s one of the things I like about Whole Foods. I like the fact that this is the store that, for almost two decades now has provided me with my nutritional wants and needs. And despite the claim that Whole Foods is only for the wealthy who can afford to spend a lot of money on groceries (thus the moniker “Whole Paycheck”), I’ve always found the prices to be competitive with the conventional grocery stores – and in some cases, even cheaper.

Whole Paycheck

The “Whole Paycheck” label is a bit misleading, actually. Yes, if you go to Whole Foods and buy high-end cheeses, prepared foods, and specialty items you are going to pay a pretty penny. But that’s the case with any store that carries those types of things.

I also take issue with this idea that shopping at Whole Foods is somehow associated with snobbery.

Truth is, at our local Whole Foods, the staff has always been beyond friendly. And it’s not as if I roll into the store in a suit and tie. You’ll typically find me doing my shopping in my gym clothes.

I’m also not sure why a store, that goes out of its way to provide local, nutritionally-superior food is equated with snobbery. The way I see it, the big conventional grocery stores that barely give local producers the time of day seem a bit more snobbish to me. Are small, local farmers not as important as giant faceless corporations? Most of which, by the way, can only exist as the profitable ventures they are due to some very generous government subsidies?

Bullish on Whole Foods

As an investor, I also find it beyond irritating that whenever Whole Foods (NASDAQ:WFM) hits a bump in the road, every trend-chasing analyst comes out blasting the retailer. They did this when the company first went public, then quickly retreated like the dirty roaches they are when the light of profitability was illuminated by market forces.

They did it again after the market tanked in 2008, only to quickly take cover in the dark walls of incompetence after the stock soared 600% over the course of the next few years. And now they’re doing it again – screaming from the rooftops that new competition from the likes of Wal-Mart (NYSE:WMT), Sprouts (NASDAQ:SFM) and Fresh Market (NASDAQ:TFM) represent the death knell for Whole Foods.

While I agree that there is a lot more competition in the space these days, Whole Foods is not going gently into that good night.

Not only is the organic food retailer a behemoth that locked in a first-mover advantage many years ago, but it’s following is perhaps one of the most loyal you’ll find. Of course, that can still only get you so far. Admittedly, loyalty can be tested by the convenience of picking up your favorite organic foods at the same place you buy your electronics and underwear. But the key for Whole Foods, in my opinion, is management.

CEO John Mackey is a beast. The guy built an empire that was harshly criticized when the company first went public to a room full of Wall Street crickets. His philosophy of business was the antithesis of what had long been considered “the way to do business.” Yet here is today, worth something like $100 million. Whole Foods’ is worth something like $13 billion. The guy knows what he’s doing. And folks who believe that he’s now going to be forced to take his ball and go home because there’s more competition around are fooling themselves.

The truth is, the company is still reporting record sales, management continues to remain aggressive on growth, and I’ve yet to walk into any Whole Foods store and find it empty.

Those who choose to dismiss the long-term value of Whole Foods due to this recent sell-off are going to miss out. Just like those who missed out when the company first went public, and just like those who abandoned hope for the retailer after the market crashed in 2008.

I remain bullish on Whole Foods and maintain by one-year, $45 price target on the stock.

I also remain bullish on Whole Foods as a company that has showed the world that you can build a profitable business by maintaining high ethical standards and just doing the right thing along the way.

Check it out. . .

Whole Foods will not go gently into that Good Night originally appeared in Green Chip Stocks. Green Chip Review is a free 2x-per-week newsletter, is the first advisory to focus exclusively on investments in alternative and renewable energies.