Investopedia: The Fresh Market Is A Breath Of Fresh Growth

It's almost traditional (if not quite cliché) to take Wal-Mart (NYSE:WMT) to task for ruining that pastoral ideal that was the American Main Street shopping experience. More recently, neo-hippies have done battle over whether Whole Foods (Nasdaq:WFM) has "gone corporate" by forcing many smaller organic specialty stores out of business, and catering every bit as much to the Audi and soccer mom set as the patchouli and hemp-shirt set.

With that backdrop, it may seem daft to try to enter the market with yet another food market concept. Even with a market already full of choices, companies like Aldi, Trader Joe's and The Fresh Market (Nasdaq:TFM) are showing that customers still aren't completely satisfied with the retail landscape. While The Fresh Market is going to have to prove that it can manage its growth (and make it a profitable growth), this is one of the most interesting retail growth stories going on today.

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Investopedia: Winn-Dixie Needs An Identity

Since emerging from its bankruptcy of 2005, Winn-Dixie (Nasdaq:WINN) has struggled to really work as a stock or as a food retailing concept. Not really a value-focused player like Wal-Mart (NYSE:WMT) or Aldi, nor a top service provider like Publix or Ruddick's (NYSE:RDK) Harris Teeter, Winn-Dixie seems to be foundering a bit as it tries to rebuild its business and its market cap. With fiscal fourth quarter earnings and 2012 guidance in hand, it is hard to see where this stock really fits.

Fourth Quarter Results as Expected  
Given the Winn-Dixie preannounced some of its fourth quarter results a little while ago, there was not a lot of drama in the numbers that the company did report. Reported sales fell almost 4%, while identical-store sales rose more than 3% despite a decline in store traffic.
 
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Investopedia: Optimism Already Built Into United Natural Foods

There is nothing new about the organic food industry anymore, and investors are already well-attuned to the big names like Whole Foods (Nasdaq:WFM) and leading distributor United Natural Foods (Nasdaq:UNFI). The question, though, is whether there is still enough runway in front of UNFI to make the stock a worthwhile addition or holding for growth-oriented portfolios. While it is true that many major supermarkets like Kroger (NYSE:KR) and warehouses like Costco (Nasdaq:COST) could go even further in stocking more organic products, much of this seems to already be factored into UNFI's stock price. 

A Good Third Quarter, But With a Few Spots 

For the most part, United Natural Foods had a solid fiscal third quarter. Reported revenue rose more than 22%, while revenue rose more than 12% on a like-for-like basis. While better than 10% growth from major customer Whole Foods was a bit below average, UNFI did see nearly 20% like-for-like sales growth in the conventional supermarket category. (For more insight, see Organic Food For Thought.)

Unfortunately, that supermarket growth comes at a bit of a cost, because it is not as profitable as UNFI's more traditional channels (smaller organic-focused chains with much less bargaining power). Gross margin slipped about 30 basis points as a result. UNFI made some of this up through operations, though, and 15% operating income growth mitigated the operating margin erosion to about 20 basis points. 

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Whole Foods Shoppers Out Of Hibernation

So much for the predictions that the Great Recession would produce a permanent thriftiness in American consumers. As the economy slowly crawls its way towards better health, Whole Foods (Nasdaq:WFMI) is seeing a solid recovery in its sales growth and dusting off the plans to roll out still more of these higher-end grocery stores. 


The Quarter In The Bag
By any standard, Whole Foods had a strong fiscal fourth quarter. Sales jumped almost 15% from the year-ago quarter, on a better-than-6% increase in square footage. Same-store sales were up a very healthy 8.7%, as traffic rose almost 7% and "basket" (basically, how much customers spent) was up about 2%

Strong as that was, the company did just as well below the sales lines. Gross margin ticked up 40 basis points and the company trimmed about 70 basis points out of SG&A. That fueled a 100 basis point bump in operating margin, translating into 46% operating income growth.


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