Monday, June 18, 2007

Will Kroger Beat Whole Foods?

"It is no secret and not even a surprise that Whole Foods Market Inc.(NASDAQ: WFMI) became such a large success. Anyone who is into natural foods knows the story well. Problem is, Whole Foods is often referred to as "Whole Paycheck" because its prices are significantly higher than comparable goods elsewhere. And yet, shopping in a Whole Foods store, it is easy to realize that much of this demand is seemingly inelastic as the stores are packed and the register lines full.

Now enter Kroger Co. (NYSE: KR). Kroger used to be just another one of the many grocery stores out there. After years, the food retailer has finally figured out that not only could it carry many of the same organic and natural foods that Whole Foods does, but that it could also do it at a lower cost. To top it off, Kroger also figured out that the profit margins were better than the ones on other packaged goods of lower quality and price."


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