Whole Foods rebounds, but there's a difference between the stock market and, well, a food market

Whole Foods stock has taken a pounding over the last year or two. Same store sales have fallen, as lower-price rivals from Costco to Walmart have increased their organic food offerings.

Whole Foods was also hurt by a weights-and-pricing scandal that added insult to the injury of already-high prices.

The first '365' store will open in a few months. Like Trader Joe's, it will offer a smaller-than-usual number of SKUs and emphasize Whole Foods' private-label products. I imagine they'll do a better job than Trader Joe's when it comes to produce, but the key to profitability will be prepared foods. Whole Foods seems to be doing a lot right, right now. But can 365 stores develop a TJ's style cult following? As readers of Build a Brand Like Trader Joe's can guess, I think it's all going to come down to the customer experience. So, I'm dismayed that Whole Foods is cutting staff at the same time... 

The company's responded to increased competition by launching a new line of smaller stores, called '365', that are plainly modeled on Trader Joe's. While the stock (NASDAQ: WFM) has climbed about 10% so far in 2016, it's still trading near a 5-year low.

So is this a good time to buy in? Maybe, but as an afficionado of the Trader Joe's business model, I'm put off by Whole Foods' recent announcement that it was going to cut 1,500 jobs. Trader Joe's outperforms in the grocery category in large measure because it is way overstaffed, by the standards of typical market.