I am originally from Texas, and attended the University of Texas in Austin, which is where Whole Foods started. There flagship store at the corner of 6th Street and Lamar Boulevard is one of their largest at 80,000 square-feet, and is more of an experience that a grocery store. It is like a small village, helping to maintain a somewhat intimate feel, and it is packed with shoppers day and night.
What sets Whole Foods apart from every other grocery store I have ever visited is their selection—more specifically, their selection of unique, organic, healthy foods from all over the planet. While there prices can be high on certain items, they do offer budget-oriented lines of products as well. Whole Foods Market Santa Barbara also offers the Scrip Program, which gives local non-profit groups and schools the opportunity to purchase gift cards at a discount. One of the company’s core values is to give back 5% of their net proceeds to the communities within which they operate, and they accomplish this through their Scrip Program. Scrip may be purchased in $500 increments, with a $5,000 maximum; your organization will receive a 5% discount on the purchase. Scrip is available in $50 or $100 denominational gift cards. (Non-profits and schools can request information about this program by calling their regional scrip hotline at 818-501-8484, Ext. 224. Or, you can also make requests through email at SP.Scrip@wholefoods.com. )
Whole Foods also offers school tours for 1st through 12th grade students. These tours last approximately one hour and include an introduction to what the market is all about, a tour of all departments, lots of samples, and goodie bags to take home. Highlights of past tours include the chance for kids to touch a fish in the seafood department and a peek inside their dairy cooler. (To schedule a school tour email: email@example.com.)
Whole Foods was started in 1978, when twenty-five year old college dropout John Mackey and twenty-one year old Rene Lawson Hardy, borrowed $45,000 from family and friends to open the doors of a small natural foods store called SaferWay in Austin, Texas (the name being a spoof of Safeway, which operated stores under their own name in Austin at that time).
Two years later, John and Rene partnered with Craig Weller and Mark Skiles to merge SaferWay with their Clarksville Natural Grocery, resulting in the opening of the original Whole Foods Market on September 20, 1980. At 10,500 square feet and a staff of 19, this store was quite large in comparison to the standard health food store of the time.
Less than a year later, on Memorial Day in 1981, the worst flood in 70 years devastated the city of Austin. Caught in the flood waters, the store’s inventory was wiped out and most of the equipment was damaged. The losses were approximately $400,000 and Whole Foods Market had no insurance. Customers and neighbors voluntarily joined the staff to repair and clean up the damage. Creditors, vendors and investors all provided breathing room for the store to get back on its feet and it re-opened only 28 days after the flood.
Beginning in 1984, Whole Foods Market began its expansion out of Austin, first to Houston and Dallas and then into New Orleans with the purchase of Whole Food Company in 1988. In 1989, they expanded to the West Coast with a store in Palo Alto, California. While continuing to open new stores from the ground up, they fueled rapid growth by acquiring other natural foods chains throughout the 90’s: Wellspring Grocery of North Carolina, Bread & Circus of Massachusetts and Rhode Island, Mrs. Gooch’s Natural Foods Markets of Los Angeles, Bread of Life of Northern California, Fresh Fields Markets on the East Coast and in the Midwest, Florida Bread of Life stores, Detroit area Merchant of Vino stores, and Nature’s Heartland of Boston.
Whole Foods Market started their third decade with additional acquisitions of Food for Thought in Northern California and Harry’s Farmers Market stores in Atlanta. In 2001, Whole Foods moved into Manhattan, generating a good deal of interest from the media and financial industries. 2002 saw an expansion into Canada and in 2004, Whole Foods Market entered the United Kingdom with the acquisition of seven Fresh & Wild stores.
Today, Whole Foods offers produce, seafood, grocery, meat and poultry, bakery, prepared foods and catering, coffee and tea, nutritional supplements, vitamins, and body care and educational products, such as books, floral, pet products, and household products, as well as specialty, including beer, wine, and cheese. The company operates more than 270 stores in 38 U.S. states and the District of Columbia; stores in Canada; and in the United Kingdom.
In 2008, Whole Foods generated almost $8 billion in sales, which was up almost 24 percent from 2007. Their stock, which trades on the NASDAQ under the symbol WFMI, is currently trading around $33.50 per share. If they meet their September quarter earnings forecast of $0.18 per share, they will earn $0.84 per share for fiscal 2009 (ending September 30, 2009), which would give the company a trailing price/earnings ratio of 40X. Analysts are predicting earnings of about $1.10 per share for fiscal 2010, which gives the company a forward P/E ratio of 31X. (The average long-term P/E ratio for the S&P 500 is 15X.)
The stock has rebounded dramatically from its recent low, hit on November 21, 2008 at $7.04, and although it did pull-back somewhat with the overall market in March, (when the broader market made its recent low), Whole Foods only fell as low as $11 and change. Since then, the stock has rallied aggressively, and is now trading close to its price of late 2007, when the overall stock market made its all-time highs (S&P 500 and Dow Jones Industrial Average). Going back to late 2005, Whole Foods traded as high as $85 per share, which was the all-time high for the company.
Looking ahead, Whole Foods will continue to expand, opening new stores in new locations, both here in the U.S. and abroad, which should allow the company to continue to grow revenues and earnings. The current stock price is a bit expensive, so I would not jump in at this level. But, Whole Foods could be a candidate for investment, should the stock (and the overall market) pull-back a bit.
I share the sentiments of many in town who are skeptical of large chains, and I prefer to support local companies when I can. However, Whole Foods is a unique company, dedicated to supporting local communities, to providing healthy and organically-grown foods, and to supplying their stores with as much locally-available product as possible. For me, Whole Foods is a taste of home, and I would highly recommend at least making one visit. If you do, I will bet you will not be disappointed, and you just might become a life-long customer.