Natural Grocers by Vitamin College (NGVC) (or “Natural Grocers”) is doing a very good job of answering criticisms that its improved comp sales performance is only a byproduct of margin-compromising price cuts. With more effective promotional activity, restrained store expansion, and appealing operating expense leverage, Natural Grocers has seen not only an improvement in comps but also in margins, driving the shares up 20% since late June.
There are still some operating challenges at Natural Grocers, including ongoing competitive footprint expansions from Amazon’s (AMZN) Whole Foods, Sprouts (SFM),