The Fresh Market Inc (TFM), Whole Foods Market, Inc. (WFM), A Selloff & Value

Whole Foods Market, Inc. (NASDAQ:WFM) also has a store base of roughly 350 locations with larger footprints providing some indication that The Fresh Market Inc (NASDAQ:TFM) could hit that 500 store target. Whole Foods Market, Inc. (NASDAQ:WFM) is the behemoth in the sector with a revenue base of around $12 billion. Any attempts to squash the much smaller Fresh Market could be a concern in the future.

Recent IPO Fairway Group Holdings Corp. ((NASDAQ:FWM) added plenty of cash after collecting the proceeds from the offering. The company only operates 12 stores in the New York City area, but it plans to add two more this year. Per the prospectus, Fairway Group Holdings Corp. ((NASDAQ:FWM) has a goal of opening 300 stores in the future.

Another competitor in the organic and fresh foods retail sector plans to come public later in 2013. Apollo Global Management LLC (NYSE:APO) expects to take Sprouts Farmers Market and its $2 billion in annual sales public while the market is hot for the sector. The company operates 150 stores mostly in west coast states where Fresh Market doesn’t operate, though Sprouts operates in California and Texas, placing the two on a collision course going forward.

Bottom line

The Fresh Market Inc (NASDAQ:TFM) appears to be facing pressure from a weak consumer even prior to a potential onslaught of competitive pressure from organic and fresh foods grocers with a bevy of IPO money. As an example in the local market, Sprouts opened a store in the last few weeks only a year or so after Fresh Market entered the market. Sprouts even announced plans for a second location later this year. The competitive landscape is heating up, right as the Fresh Market has to replace several key executives.

With the stock trading at over 20x next year’s earnings, The Fresh Market Inc (NASDAQ:TFM) is no bargain considering the recent stumbles by the company. As mentioned in the last article, the sector might need a breather after strong gains in the last couple of years. In fact, with all of the new stores investors might want to focus on the organic food suppliers such as Annie’s and Hain Celestial Group while investors wait to figure out if Fresh Market is a broken stock or a broke company.

The article After the Selloff is The Fresh Market a Value Now? originally appeared on Fool.com and is written by Mark Holder.

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