Three Reasons to Sell Whole Foods Market, Inc. (WFM)

But much of that potential is already baked into the stock, and investors need to carefully consider what any sign of declining growth could mean for the stock’s price.

3. The rise of… farmer’s markets?
I’ll admit that at this point this risk might seem a little far-fetched, but indulge me for a minute.

Many of Whole Foods’ customers are very conscious of where their products come from and how they were grown/raised. More than 31% of Whole Foods’ products come from a single vendor, United Natural Foods, Inc. (NASDAQ:UNFI). Though Whole Foods goes out of its way to get local produce in its stores, the fact remains that there’s still a lot of food that’s reliant upon using lots of petroleum to ship it to customers.

One way that eco-conscious shoppers can cut down on the carbon footprint of their food is via farmer’s markets. And though they represent just a small fraction of all food sold, farmer’s markets are in the middle of a meteoric rise in popularity.

Source: USDA.

Should this wave continue indefinitely into the future, the very eco-conscious customers who were attracted to Whole Foods’ organic message could leave in favor of the localvore movement (only eating things grown locally).

What does this mean for Fools?
I’ll admit that reviewing these risks — particularly the first two — are sobering reminders for me that Whole Foods Market, Inc. (NASDAQ:WFM) stock has serious obstacles in its path. That being said, I think it is the leader of one of the greatest, most sustained movements we’ve ever seen outside of technology — rebalancing a fundamental shift in how we relate to our food that changed after World War II. Though I’m not buying new shares now, I’m certainly not selling anytime soon, either.

The article 3 Reasons to Sell Whole Foods Stock originally appeared on Fool.com and is written by Brian Stoffel.

Fool contributor Brian Stoffel owns shares of Whole Foods Market (NASDAQ:WFM). The Motley Fool recommends and owns shares of Whole Foods Market.

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