Whole Foods Q4 2014 results: “Values Matter” might be working for the organic grocery chain.

Whole Foods “Values Matter” Turnaround Campaign Might Actually Be Working

Whole Foods “Values Matter” Turnaround Campaign Might Actually Be Working

Moneybox
A blog about business and economics.
Nov. 5 2014 6:21 PM

Whole Foods “Values Matter” Turnaround Campaign Might Actually Be Working

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“Values Matter.”

Photo by Justin Sullivan/Getty Images

The past several months have been a dark time for Whole Foods. To investors, it's had only bad news to report, and its shares have taken a beating accordingly. Among some consumers, it's been written off and even vilified as overpriced and overrated—the "Whole Paycheck" organic grocer. So it's a big deal that Whole Foods on Wednesday finally reported a good quarter.

Whole Foods shares are up more than 7 percent in after-hours trading on fourth-quarter profit that beat analysts' targets and sales growth that was in-line with expectations. For the year, Whole Foods reported record total sales of $14.2 billion and a 10 percent growth in square footage with 38 new stores. "We're pleased with our performance," said co-Chief Executive John Mackey—a boring statement, to be sure, but a great improvement from the dire comments he made in the previous quarter about Whole Foods' "negative narrative."

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Whole Foods has already cut prices on its merchandise and, in an effort to shake free of its negative narrative, last month announced a national branding campaign. As part of its "Values Matter" push, Whole Foods has rolled out 22 video ads on YouTube explaining its commitment to sustainable and locally grown products; the budget for that campaign, while not disclosed, is estimated at $15 million to $20 million.

On the quarterly earnings call, Whole Foods executives dodged specific questions about pricing—does Whole Foods want to match its competitors on price? Undercut them? Charge more for more value?—and instead said their strategy would be uniquely adapted for each city. "It will depend on the competitive conditions that we find ourselves in," they added. Over the long term, the company wrote in its earnings release, it "sees demand for 1,200 Whole Foods Market stores in the United States."

Based on the turbulence of this year and the executives' reticence to discuss too many specifics, you might want to take all of that with a grain of salt; meanwhile, new competition in the health-foods and organics market—like that of Walmart—can't be written off just yet. Even so, for the first time in a long time, Whole Foods had some good news to report.

Alison Griswold is a Slate staff writer covering business and economics.