Perhaps because organic food has never been more popular among American consumers than it is right now, Austin-based Whole Foods is struggling. And on Wednesday the chain reported its worst performance in a decade, announcing its sixth consecutive quarter of falling same-store sales. (They also announced they would be closing nine stores, the most it has ever closed at one time.)

Today organic food is so mainstream that organic chains have to compete against big-box stores. According to the Organic Trade Association, in 2015, Americans bought their  organics from:

  • Mass-market retailers- 53.3%
  • Natural and specialty retailers- 37.3%
  • Other- 9.4%

From the article:

“In many ways, the story of Whole Foods’s decline is also the story of how the organic movement took over the United States. Between 2005 and 2015, sales of organic food increased 209 percent, according to the Organic Trade Association. Last year, organic sales topped $43.3 billion.

The driving force behind this growth, most analysts agree, is none other than millennials: Consumers aged 18 to 34 are the largest buyers of organics, and they’re the most likely to consider themselves ‘knowledgeable’ about their food. As they came of age, mainstream grocery chains have been forced to adapt, too.”

And they have; Walmart’s upped their organic selection in 2006, Kroger created the Simple Truth brand in 2012, and just recently Aldi announced a $1.6 billion U.S. expansion, “with much of that growth aimed at offering ‘a wider range of organic and gluten-free products.’” (But, the largest organic retailer in the United States is still Costco. In 2015 they sold $4 billion of organic produce and packaged foods and, like Walmart, Kroger and Aldi, they sell organic produce for much less than natural food stores, farmers markets, or Whole Foods.)

But Whole Foods isn’t giving up just yet. Besides closing stores and lowering prices, they are focusing on their new project, 365 by Whole Foods. This new store, for “value-conscious” consumers, will look and feel different than the tradition Whole Foods. It’s also (kinda) marketed toward millennials.

We love Whole Foods, but price matters and Costco is really stepping up their game (so is Aldi). But, the worst thing to happen would be for Whole Foods to loosen their firm commitment to quality, in order to keep up with their competition.

What’s more important to you when looking for organic food? Price, the look and feel of a store, or convenience?

Source: The Washington Post