When a company fires several board members, things are not going well. That's what Whole Foods just did.
According to the Wall Street Journal, Whole Foods stores are struggling. In the 2nd quarter of 2017, sales fell by nearly 3%. This isn't a one-off result. Revenue growth has been trending downward since 2012. Then, in the 4th quarter of 2015, revenue growth hit negative territory, meaning that sales actually began to shrink. Since 2013, Whole Foods's stock price has fallen by almost 50%.
To stop the bleeding, Whole Foods brought in new board members with retail and financial experience.
What Is Going on at Whole Foods?
It would be nice if the organic outlet's struggles were the result of Americans waking up to the fact that Whole Foods has been lying to them for years. Alas, that's not the case. The organic industry has grown year after year, with U.S. sales hitting more than $43 billion in 2015.
Why? Because Whole Foods's strategy of scaring people about their food worked. Despite the fact that the EPA, USDA, and FDA declare our food supply is perfectly safe, Whole Foods has peddled lie after lie about pesticides, GMOs, and "chemicals."
By demonizing biotechnology and conventional agriculture, Whole Foods profited handsomely. Millennials in particular have been suckered into Whole Foods's universe of alternative facts. Though the Washington Post reports that they think themselves quite clever about food, Millennials apparently can't be bothered to read nutrition labels. If they did, then they would know that an alleged "superfood" like quinoa (what ACSH President Hank Campbell calls "hippie porridge") isn't all that different from plain old, boring brown rice*.
So, what is the reason for Whole Foods's woes? Traditional grocery outlets didn't sit idly by while Whole Foods raked in obscene profits. Organic food can now be bought everywhere, including places like Target. Why spend your whole paycheck at Whole Foods when you can spend merely half of it buying organic food at Walmart?
It is deeply ironic that the very grocery stores Whole Foods has disparaged over the years for selling impure food are the reason for its recent downturn in revenues. Whole Foods's free-range chickens have come home to roost.
*The nutritional benefits of quinoa over brown rice are small and certainly not enough to justify the price difference.
