Why The Whole Foods Market Brand Isn't Broken

A survey of Whole Foods Market, Inc’s WFM target customers indicates that the brand is intact, but that the company “still has much to do to improve its price image,” Credit Suisse’s Edward J. Kelly said in a report. He maintained an Outperform rating on the company, with a price target of $40.

Brand Progress

Credit Suisse’s survey “paints a picture of opportunity and some progress,” reflecting that customers still wish to make purchases at Whole Foods Market. A staggering 80 percent of the survey respondents indicated that they shop at Whole Foods Market, with most saying at least once a month.

“This point is encouraging, as it's easier to build sales with existing customers than attract new shoppers,” analyst Kelly pointed out.

Strong Store Experience

More than 80 percent of respondents have a high rating to service and the overall shopping experience at Whole Foods Market, indicating that cost cuts have not really impacted store execution. “WFM's differentiated experience still seems to be a key traffic driver,” Kelly noted.

Poor Price Image

Although most of the target consumers continue to shop at Whole Foods Market, merely 30 percent visit the company’s store at least once a week. The survey indicated that price was “the largest deterrent to frequency.” About 45 percent of respondents said they found Whole Foods Market to be overpriced.

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