The Biggest Risks Facing Whole Foods Market

Why a looming recession could really hurt Whole Foods.

Jim Mueller, CFA
Jim Mueller, CFA and Austin Smith
Dec 9, 2012 at 12:00PM
Consumer Goods

In the following video, analysts Austin Smith and Jim Mueller are generally upbeat about Whole Foods Market (NASDAQ: WFM), but they want to warn investors of three risks the company faces.

Jim thinks the possibility of another recession is the biggest risk to this upscale organic-grocery chain, as the Great Recession correlated with Whole Foods' largest stock-price drop. Two other threats to the store's profitability are higher underlying food costs and an increase in commercial lease rates.

Austin points out that while these three threats could hurt Whole Foods' bottom line, they'd also harm its competitors. On the whole, the analysts share a cautiously optimistic outlook.