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Fewer Profits Eat Into Whole Foods Financial Future

Analysts say the Whole Foods grocery store chain is facing severe financial problems.

When Whole Foods opened a store in midtown Detroit two years ago officials touted it as an oasis of healthy produce in an urban food desert, albeit a fairly expensive oasis.

But analysts say a combination of falling profit margins and slowing sales growth is posing a long-term danger to the grocery store chain.

The company’s shares dropped 10% this week and are down about 30% so far this year.

Whole Foods has been cutting its prices, fighting the perception it’s too expensive. The chain is also opening a series of new, smaller stores targeting younger customers with less pricey products.

But the cost-cutting has hurt Whole Food’s profit margins.

And it faces allegations of price-gouging following last month’s revelation that a Whole Foods store in New York was overcharging customers for some items.

Whole Foods officials blame the problem on human error. 

Image credit: Quinn Klinefelter/WDET

About the Author

Quinn Klinefelter

Senior News Editor

I grab news in the morning, check the papers and the wires, call sources and take a big gulp of coffee. That’s how I start the day.

qklinefelter@wdet.org  

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