United Natural Foods Inc. fell for a second straight day as investors worried about weakness at Whole Foods Market Inc., which accounts for more than 30 percent of the company’s sales.
United Natural shares slumped as much as 5.8 percent to $38.79 in New York on Wednesday, following a 1.6 percent decline the previous day.
The company’s stock generally moves in tandem with that of Whole Foods, the high-end organic grocery chain that is its top customer. Though Whole Foods’ stock was little changed on Wednesday, it dropped in five of the past six trading days -- slipping a total of 16 percent this year.
Whole Foods, which helped pioneer the organic-food industry in the U.S., has been battered by mainstream chains pushing into the market. With its hard-to-shake reputation for being overpriced, Whole Foods is struggling to take on retail giants such as Kroger Co. and Wal-Mart Stores Inc. Those woes have in turn spelled trouble for United Natural Foods, which distributes organic groceries.
“The company finds itself pushing a boulder uphill,” Scott Mushkin, an analyst at Wolfe Research, said in a report this week. “Some of its important customers are having a difficult time growing their businesses, especially Whole Foods.”
Shares of United Natural Foods had been up 4.6 percent this year before Wednesday’s tumble.