Whole Foods wants its grip on the organic food industry back. The grocery chain used to dominate the market, but it has steadily been losing its lead to supermarket chains and other grocery stores that offer organics at lower prices—and it’s well aware. To strike back, the company laid out ambitious plans this year to open new stores aimed specifically at millennials, and it responded to growing competition by providing more store-branded food items and launching a national rebranding campaign. But its reputation was badly damaged this summer by a New York investigation that revealed what many customers have long make grumbling jokes about: The store routinely overpriced some of its products.
“Straight up, we made some mistakes,” Whole Foods co-CEO Walter Robb confessed in early July. Though his candor was appreciated, it wasn’t enough to reverse the outrage sparked by the investigation’s findings. In the wake of the overpricing scandal, Whole Foods on Wednesday reported disappointing results for its third quarter, which ended July 5. Though its total sales for the 12-week period rose to $3.6 billion, its diluted earnings per share fell short of analysts’ expectations and growth slowed sharply in the last few weeks of the quarter. The company also issued predictions for its fourth quarter that are short of previous expectations.
Whole Foods seems to be relying on the launch of its new millennial-themed stores, called 365 by Whole Foods Market, for salvation. On Tuesday, Robb emphasized the upcoming rollout of the new stores next year, as did the new chain's president Jeff Turnas, who said Whole Foods is “really excited” for the launch. Meanwhile, Robb admitted that there is "no magic bullet for restoring whatever trust was lost" after its pricing scandal. Well, there could be one: even lower prices.