1. Whole Foods should acquire Abe’s Market (before Sprouts does)

2. Whole Foods is in the amazing industry, but isn’t crushing rivals
WFM has been growing nicely, crushing the market, and tripling in value in just three years. But it
appears that this isn’t particularly, or only, on account of great management. The natural, healthy and
organic foods market has been growing dramatically, though it’s still a tiny portion of grocery
shopping.
The Hain Celestial Group (NASDAQ:HAIN), which brands, markets, and distributes these food markets
has actually outgrown WFM in recent years.
Analysts think the organic food market is growing at about 13% p.a.

3. In fact, Sprout’s revenue growth is >> Whole Food’s revenue growth
Sprouts 8.5%-9%
Same store sales growth YOY:
WFM : 7.2%-7.5%

4. This isn’t Webvan… Tesco has made online a very succesfull strategy
• Shopping at Whole Foods is a treat, but many people are short on time to visit a store, or short
on time for shopping but happy to pickup their shopping.
• Online shopping introduces its own logistics complexities, but also makes it possible for WFM to
address the many millions of Americans (and Brits) who are not nearby a WFM store.
• WFM can emulate the models built by Tesco (UK). Tesco does £3B in online sales, has 120k multichannel customers. See: www.tescoplc.com/index.asp?pageid=540#/.
That’s almost 10% of Tesco’s sales.
•Tesco’s Click-and-Connect is a good example of a good combination for online and brick-andmortar shopping.
• Acquiring Abe’s is the quickest way for WFM to get online successfully. See here.