Shoppers may be looking for more bargains and be more hesitant to trade up, which could become a concern for Whole Foods Market Inc., an analyst said Tuesday.
Jefferies' Scott Mushkin said in a client note that industry sources are saying that Whole Foods' sales are still very good, but have been slowing over the past month.
Whole Foods sells natural and organic foods, which typically draws more high-income consumers, but even those shoppers are beginning to pull back on their spending lately given economic concerns.
The analyst said that a recent survey shows that traffic at the Austin, Texas chain still seems to be strong, but that consumers are not as willing to spend as they used to be.
"In September, 48 percent of the survey participants thought consumers were more likely to spend when compared with last year, which was down from over 80 percent post the July 4th holiday," Mushkin wrote.
The analyst maintained a "Hold" rating and $68 price target on Whole Foods. The company's shares finished at $65.67 on Monday and have been trading near their 52-week high of $68 which was reached in late July. They are well above their low for the past year of $34.04 set last October.