Ever since the U.S. Federal Trade Commission revealed the chief executive of  Whole Foods Market Inc.  had posted anonymously about his company and rivals on an Internet message board, investors have been wondering about the long term impact on the company’s stock.

According to short-interest data released late Tuesday by the Nasdaq, a growing number of investors are betting the company will not escape unscathed. 

Short interest in Whole Foods stock – a measure of investors betting its price will fall — rose more than 27 percent in July, according to the Exchange.

That increase of 5.3 million shorted shares brought the company’s total short interest to 24.4 million shares, or about 17.3 percent of the company’s shares outstanding. 

Mackey apologized to shareholders for the messages he posted on a Yahoo! chat forum under an alias, but the U.S. Securities and Exchange Commission has already launched a probe into the matter. 

Short sellers in Whole Foods stock — which hit its lowest level in nearly three years on Wednesday — may be eagerly anticipating the probe’s results.

Meanwhile, Whole Foods CEO John Mackey is communicating  a little bit less nowadays.  A note on his CEO blog on the Whole Foods website says the blog is on hold during the company’s internal investigation.

 –By Emily Chasan

Readers eagerly awaiting the arrival of what may be the most anticipated book release in history are expected to show remarkable self-restraint.
The latest and last instalment of the Harry Potter series arrives in stores at 12:01 am July 21, but research by Wal-Mart shows that despite suspense over the ending, most readers are planning on keeping their curiosity in check.
Nearly 9 out of 10 intended purchasers say they’ll read straight through to the end rather than skip to the final pages to find out what happens, according to a telephone survey of Americans age 16 and older conducted on July 17 by Wal-Mart.
Nearly 17,000 people have already vowed to keep the ending a secret at www.makethepledge.net
About 28 million people say they plan to buy the book this weekend, according to the survey. That’s equivalent to the number of people in the states of New York and Michigan combined.
And, the research suggests that America is truly a nation of optimists. 58 percent of those planning to buy the book believe Harry lives at the end.
Wal-Mart is doing its part to keep the secret safe - over 50,000 ear plugs will be distributed Friday at Wal-Mart stores where the retailer predicts the largest sales will happen. The secret of who dies will not be discussed at the registers, the company said.

–Written by Regan E. Doherty

    J.C. Penney plans to open its first Manhattan store by the beginning of 2009, but there’s a lot of work to be done to the site before the store can open. 
    The Plano, Texas company is launching the store smack in the middle of midtown - and only a block away from rival Macy’s - in the Manhattan Mall, between 32nd and 33rd Streets on 6th Avenue.
    The store will measure about 150,000 gross square feet when completed. Current occupants of the space are being allowed to stay through this year’s holiday season before they clear out, said J.C. Penney spokeswoman Darcie Brossart.
    “The Manhattan Mall needs a lot of work before J.C. Penney can even start to build the store. (The mall) is a big square and the middle is hollow, and J.C. Penney is going right in the middle,” Brossart said.
    J.C. Penney announced in April is plans to open 250 new stores over the next five years. By 2011, the retailer will have about 1,200 stores.    

– Written by Sarah Coffey
    

For those praying for the demise of the skinny jean, hope may be in sight.

As a promotion for back-to-school shoppers, American Eagle Outfitters is sponsoring a contest in which customers will choose their favorite jeans fit for the fall.

Through July 24, shoppers who buy a pair of AE jeans will receive a ticket indicating which fit they chose. On Aug. 28, the most-purchased fit for girls and guys will be announced in AE stores and on www.ae.com. Customers who purchased the winning fit will be able to redeem their ticket for a free pair of any AE jeans in the store. All other tickets can be redeemed for $10 off any pair of AE jeans.

Happily, the choices include more than the ubiquitous “skinny” jean.

Fits for women range from:
The “Boyfriend” - sits low on the waist with a relaxed, loose leg
The “Patch Pocket and Utility Wide Leg” - wide-leg styles which open up to a 21 inch leg
The “Stretch Trouser” - sits low on the waist and opens to a 23 inch leg
The “Favorite” - has the highest waist of all AE jeans fits and is flared at the leg The “Skinny” is also offered, as is the “Straight,” a similar fit but with more room from knee to ankle.

Men’s fits such as boot cut, loose, and low rise versions of boot, slim boot and slim straight also part of the contest.

The company, which sells jeans, graphic T-shirts, accessories, outerwear, footwear and swimwear for teens, operates more than 800 stores in the United States and Canada.

– Written by Regan E. Doherty

    How can you earn yourself a place with the cool kids in school? Or boost sagging department store sales?
    Answer — M.A.C lip gloss.
    Seventeen-year-old Lil Mama’s number ”Lip Gloss” describes how her “poppin” lip gloss — be it M.A.C or L’Oreal — is “stoppin” the boys. The song is currently No. 21 on The Billboard Hot 100. 
    One analyst thinks the song, an unpaid endorsement for M.A.C and owner Estee Lauder, could be an unexpected way to drive sales of those brands in department stores as girls scramble to find the shade of lip gloss Lil Mama wears in the video.
    “Unpaid endorsements (song lyrics) carry a lot of weight,” wrote Bank of America analyst April Scee, who pointed to rappers mentioning liquor brands or wearing licensed jerseys in songs as other examples.
    Estee Lauder, like many other companies, suffered a sales slump in the past year, after Federated’s (now Macy’s) acquisition of May left it with fewer stores for sales.
    Group President John Demsey told Reuters recently that he was seeing U.S. sales normalizing, and this song could make the M.A.C brand even more popular, Scee wrote.
    So, there’s some unexpected “referral business” for Estee Lauder.
   

– Written by Aarthi Sivaraman

Online sales of beauty products makes up four percent of sales in the more than $42 billion business  — and are growing fast, according to a consumer research report.
 
One in ten women said they hit the Web for their skin care, makeup and perfume needs, according to a report titled “Emerging Channels: Beauty Care Products Over the Internet” by retail research firm NPD Group. More than 15,00 women were survey.
 
Forty three percent of them said they shopped more online in 2006 than in 2005.
 
Why? Because it sure beats standing in lines at stores.
 
More than 74 percent of these women, aged between 18 and 64, said it saved time while about 70 percent thought “its easier/quicker to shop online.”
 
That said, only their trusted brands enjoy good online sales, said NPD senior beauty analyst Karen Grant.
 
“We find that women are less accepting of buying new brands over the Internet, but they are spending their money on brands they know and trust,” Grant said.
 
That could spell good news for beauty companies like Estee Lauder  and Elizabeth Arden, which have said they felt a continuing pinch in U.S. sales following the Macy’s/May Department stores mergers.
 
In the past quarter, Estee said positive internet sales were partly responsible for offsetting weak U.S. sales.
 
Fifteen percent of women in the $75,000 and over range shopped beauty online, compared to 10 percent in the $35,000 to $44,000 category and 7 percent in households that make less than $35,000.
 
And “baby boomer” women — those aged between 45 and 64 — shop the most online, followed by those who are in the 18 to 34 age range, according to the survey.

 – Written by Aarthi Sivaraman

When it comes to paying more for gas, consumers would rather sacrifice nonessentials than use alternative transportation, according a survey conducted by Morgan Stanley’s Discover Financial Services.

If gas prices increase by $1: 

• 70 percent of car owners said they would cut back on entertainment spending
• 66 percent said they would change their vacation plans 
• 64 percent said they would postpone a major purchase

Less than one in four (24 percent) said they were somewhat likely or very likely to take public transportation. Sixty-one percent were not very or at not all likely to walk or ride a bicycle, the survey reported.
 
Fifty-two percent of those polled said they were somewhat or very likely to cut back on grocery spending if gas prices rise by $1.
 
The average price for regular unleaded was $3.14 at the time of the survey.

-Written by Regan E. Doherty

Kroger, the top U.S. grocery store operator, may be getting squeezed by rising dairy prices, with competition from other retailers keeping it from passing on some price increases from suppliers.
 
In dairy, “the rate of inflation was pretty fast,” Chairman and Chief Executive David Dillon said, while discussing first quarter earnings. “For competitive reasons, we don’t want to move the price up too quickly.” 
 
Commodities like dairy are more subject to fluctuations in volume as well as cost, Dillon said. Inflation in this category is generally not sustained, but subject to swings and cycles.
 
“We choose sometimes to be a little slower,” Dillon said. “It doesn’t help us much to pass through the whole increase if it hurts our sales.”
 
Kroger has also seen the same sort of pressures when it comes to produce prices, he said.

–Written by Regan E. Doherty

Mass-market retailers putting together their orders for the holiday season might want to prepare for the worst. Mark Zandi, the chief economist at Moody’s Economy.com, said home price weakness may well worsen in the autumn, hurting consumer sentiment and retail demand heading into the end of the year. “I think retailing will be very, very soft, particularly for lower, middle-income households,” he told the Reuters Global Real Estate Summit in New York. However, luxury retailers should do fine as the well-off will be relatively unscathed by a housing downturn, Zandi said.

British retailer Tesco may have a new item for sale: some lakeside property in Prague.

The world’s fifth largest retailer has already been selling off  some U.K. properties as it tries to unleash billions of pounds in value from those properties.

At the Reuters Consumer and Retail Summit, Finance and Strategy Director Andrew Higginson said the retailer will probably extend that sell-off to properties outside Britain at some point.
 
“No one was building in Central Europe when we started, so we built and we’ve got some fantastic assets there. We have the lakeside of Prague, a huge shopping development,” he said.

Higginson also told the summit that the Bank of England needs to be careful not to go too far with increasing interest rates, saying that consumer spending was already slowing.
Video: Tesco warns of tough year ahead