Whole Paycheck? Whole Foods To Lay Off 1,500 Workers As Pricey Reputation Hurts Sales

Is this another sign of economic downturn or simply that better quality food is more widely available, thus causing competition to intensify? The latter seems more likely: grocery chains are expanding higher margin organic and more exotic foods, cutting into Whole Foods' share.

The company has also suffered from lingering negative publicity about its prices, a reputation exacerbated by charges from New York officials that it overcharged for certain items. Most consumers probably never noticed but a key to the company's higher margins was trust - and that may have been damaged in the ensuing controversy. As Apple and others have long understood, your ability to command premium prices is only as good as the popular perception that you are worth it. JL

Neal Ungerleider reports in Fast Company:

Whole Foods showed disappointing sales numbers last quarter, in part because of lingering bad press.

Something curious was buried in Whole Foods’ latest regulatory filing: The high-end supermarket is letting go of about 1.6% of its workforce in the coming months. On Monday, Whole Foods said it would cut 1,500 jobs over the next eight weeks.
Though it expects most of the cuts to come through "natural attrition," Whole Foods says that many of the workers will be able to find other positions at the company, since it is currently planning at least 100 new stores and hiring for 2,000 open positions.
Whole Foods showed disappointing sales numbers last quarter, in part because of lingering bad press: Earlier this year, city officials found that the company was overcharging customers in New York. Co-CEO Walter Robb also said in a summer conference call that California’s new paid sick leave law has been adding to employee expenses.
Whole Foods is also gearing up to debut its new, lower-cost 365 chain next year , which the company has been pitching to the public as a grocery store skewed toward millennials. The first planned 365 location, in Los Angeles, has spawned unexpected PR headaches for Whole Foods; residents of the neighborhood are complaining that they don’t want a 365 location, and that Whole Foods should instead open one of its traditional stores.