Should Whole Foods Run For the Hills?

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Well, the Whole Foods boycott has certainly taken off!  At least, on Facebook, where the "Boycott Whole Foods" group has gathered 16,000 members.  Does this mean that Whole Foods is headed for the ash-heap of history?  At least one blogger thinks so:

Cohan writes: "Is this threat more bluster than bucks? If so, can you profit from it? As of Aug. 4, Whole Foods expected one percent sales growth for 2009 -- about $8 billion in revenues. But Whole Foods is showing improvements in its cash generation -- adding $322 million in the quarter ending this April and another $347 million in the quarter ending July.

"So unless the boycott movement takes away that one percent growth by a meaningful amount -- say $80 million -- I would not bet against the stock. Here's a quick estimate of how many boycotters it would take to make that much of a difference. If the typical Whole Foods customers spends $200 a week there, I estimate it would take only 7,700 boycotters a year to cut one percent from its sales."

Okay, what are the odds that half the people who signed up to boycott Whole Foods spend $200 a week there?  The class of people who are most worked up over this is not necessarily contiguous with the class of people who drops $800 every single month at a single grocery store.  Looking over the Facebook list, I see, broadly, three groups of people:

  • Students
  • People who live in a handful of very liberal urban areas
  • People who live in hippy towns and/or college towns

There are exceptions, but this is the overwhelming effect of the list.  There is also an amusing minority who live in places that don't have a Whole Foods anywhere near them, like Waterloo, Iowa, or Finland. 

The students don't have any money, so their boycott will probably be mostly indistinguishable from the Finnish boycott.  As for the rest . . .

These people think they are indispensible to Whole Foods' business, because in their area, they are.  But according to Google, there are more Whole Foods per person in Houston, Texas, than in New York City.  I don't think anyone could look at a map of the distribution of Whole Foods stores in, say, Philadelphia, and proclaim that this looks much like the distribution of people who are so fired up about national health care that they are willing to cause themselves great personal inconvenience in order to punish the CEO of Whole Foods for writing an op-ed in the Wall Street Journal.


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It looks like the distribution of people with a lot of money.  Which makes excellent business sense, because Whole Foods sells a very expensive product. Who drops the most money at Whole Foods?  Extremely affluent families, most of them suburban, who have excellent health insurance.  Yes, they may well vote Democrat.  But they're not all shopping at Whole Foods because of political principle.

Even if they were . . . how many conservatives are still boycotting Dannon yogurt?

And of course, some, maybe many, of the people "boycotting" Whole Foods spend less than $50 a month there, the way I do.  Or don't shop there at all, making the boycott cost free. 

Meanwhile, Whole Foods has 70,000 fans on Facebook.  And the boycott is publicizing to a bunch of folks who probably would not otherwise have noticed that by shopping at Whole Foods, they can give money to someone who agrees with them on health care!

I could be wrong here.  But I will be very surprised if the boycott is even detectable in next quarter's numbers.


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Megan McArdle is a columnist at Bloomberg View and a former senior editor at The Atlantic. Her new book is The Up Side of Down.

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