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The Whole Foods Boycott, now nearing 15,000 members on Facebook alone, is putting financial pressure on the grocery company. Monday the stock took a big drop but partly rebounded during today's trading. That is, before CNN ran a story critical of CEO John Mackey at 5 p.m. The company was already under some stress before the boycott, according to CNN: Whole Foods, like most other retailers, has struggled to grow its sales through the recession as consumers..... clamped down on their spending or shift more of their purchases to lower-priced offerings..... Michelle Chang, analyst with investment research firm Morningstar, said the company has been struggling with declining store sales for the past three quarters. They've been trying to lose their high-price image, said Chang. She said the retailer's acquisition of rival Wild Oats in 2007 also was a "costly endeavor" and its international expansion hasn't been as successful as it had hoped.
So it probably wasn't a great time for the CEO to alienate most of his customers. "Whole Foods relies heavily on its brand and image," Chang said. "Any concern about its image would damage sales heavily." "Whole Foods holds a certain appeal to consumers and if it deviates from that it could see some negative reaction from consumers," she said.
The above quotes are from the meat of the story, the lead is even more devastating: Whole Foods' CEO John Mackey is known for his tendency to shoot from the hip. This time, Mackey may have shot himself -- and his company's brand -- in the foot by getting too personal on the very public issue of health care reform which has sparked calls to boycott the grocer. "Certainly when our customers tell us they are unhappy to extent that they are boycotting our stores, we are concerned," said Libba Letton, spokeswoman for Whole Foods. "We don't want them to leave us."
So this story ran at 5 p.m. today right during after hours trading. Guess what happened to Whole Foods (WFMI) stock? Details inside.
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