Natural Grocers by Vitamin Cottage (NYSE:NGVC) (or "Natural Grocers") may not have the same image issues as Whole Foods (NASDAQ:WFM) (aka "Whole Paycheck") or cause the same consternation with the crunchiest of organic food shoppers - Whole Foods, Sprouts (NASDAQ:SFM), and Fresh Market (NASDAQ:TFM)
do all sell some conventional products - but it does have its
challenges. In a market where organic/natural food is becoming more and
more mainstream, alternative destinations like Trader Joe's, Kroger (NYSE:KR), and Target (NYSE:TGT) continue to represent ongoing threats to Natural Grocers' traffic and growth plans.
These share are down another 20% from where I last left them, which isn't too good next to Sprouts or Whole Foods, but isn't too awful next to Fresh Market or United Natural Foods (NASDAQ:UNFI)
(a wholesaler and distributor of organic and natural foods).
Unfortunately, weak comps remain a key issue with the company and the
stock, as sub-5% comps just don't get the job done in terms of long-term
sales per store and margin leverage.
At these levels, I'm getting more interested in the shares. I do
believe the disappointing comp traffic growth is a serious threat to the
long-term bullish argument, but I also think that Natural Grocers has
an attractive and defensible business plan that can still work.
Read the full article here:
Natural Grocers Needs Some Growth Hormones For Store Traffic
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