The New Organic Walmart Is Eating Whole Foods’ Lunch

Over much of the past 30 years, Whole Foods Market co-founder John Mackey enjoyed wild success selling organic groceries to the masses. That brought media buzz, fast growth, and high profit margins to his grocery chain. It’s also attracted imitators. Now, with the likes of Kroger and Wal-Mart Stores muscling into everything from organic milk to sustainably raised salmon, Mackey finds himself fending off challenges from bigger rivals intent on eating Whole Foods’ lunch.

Just how well the competition is doing became clear on May 6 when Whole Foods reported that sales growth at stores open more than 57 weeks had slowed to 3.6 percent in the most recent quarter, well off the 5.3 percent gain forecast by analysts. Mackey also announced a plan to revive growth by starting a lower-priced chain aimed at millennials next year. The disappointing growth and seeming change in strategy spooked investors, who trimmed almost 10 percent from Whole Foods’ stock price on the day after the news.