Whole Foods Reeling After Consumer Complaints

Well, some said it could never happen, but the leading purveyor of “healthy and organic” groceries is getting trashed by the very people who, last year, were singing its praises. Whole Foods is under the gun, and it doesn’t look like things will get much better any time soon.

In its most recent report, shares of Whole Foods dropped about 5 percent, and an analyst downgraded the stock to an “underperformer.” In Wall Street parlance, you may as well spray paint “sell” on Whole Foods. There was a brief glimmer of hope a few days later, but nothing to bridge the 15 percent drop the company has faced in the past year.

Industry insiders are basing their negative responses to Whole Foods in part on customer surveys. Where once the chain would receive glowing reports – despite their outrageous prices – now things are not so rosy. In one survey, 7 out of 10 said they saw no improvement in prices, even after the chain vowed to make a difference for customers at the cash register. The move was supposed to make Whole Foods more competitive with other, lower-priced specialty chains, such as Trader Joe’s. So far, not so good.

From a food and beverage PR perspective and a consumer PR perspective, Whole Foods failed to make good on their promises. Customers are still calling it “Whole Paycheck,” and they are not doing so with an understanding smile on their face.

Worse, the chain’s perception as a better grocer with better quality products is changing. In response to a recent survey, more than half of the customers said they felt the quality of food was only sometimes better. Less than one-quarter of those surveyed said the food was “definitely” better. When it comes to customer satisfaction, when you go from “almost everybody” is happy to less than 25 percent satisfaction, you have a real problem.

And now that they are perceived to have broken promises to fix their issues, things are even worse. Will Whole Foods pull out of this tailspin before they are completely overtaken by fast-rising competitors? If they do, it will be because of a strong and effective PR effort. Anything less than perfect and they may end up on the always growing pile of also-ran grocery stores.