Whole Foods’ customers are checking out — and they’re bringing their business elsewhere.
According to Barclays analysts, the organic purveyor and supermarket chain has lost about 14 million of its customers over the last 18 months.
"The magnitude of the traffic declines … is staggering," said Barclays.
Analysts also posit that many of those same customers are now getting their organic fix at a more conventional food store: namely, Kroger.
Kroger has been steadily stealing customers from Whole Foods ever since they started focusing more of their efforts into supplying organic food, reports Business Insider. In 2013, the supermarket launched its own line of Simple Truth organic and natural foods, and in recent years, they’ve dedicated more of their floorspace to the kinds of items that might entice a Whole Foods customer.
Overall, Kroger charges about 15 percent less than Whole Foods for its organic food, according to a mid-2016 study from Business Insider.
Because of Kroger’s recent push into the organic market, Barclays analysts believe that Kroger has become the direct recipient of Whole Foods’ former business — they say Kroger has earned $16 billion in organic and natural sales over the past 12 months, while Whole Foods pulled in only $15.8 billion over the same time period.
Unfortunately for Whole Foods, the analysts don’t see that trend reversing anytime soon.
"As most retailers know — once traffic has been lost, those patterns rarely reverse," noted Barclays' Karen Short.
Whole Foods, meanwhile, had already acknowledged this very threat in February.
"The more conventional mainstream supermarkets have upped their game," explained Whole Foods CEO John Mackey on a call with analysts. “They began to study (Whole Foods) in a more systematic fashion, particularly as they began to see their customers migrate over to doing more and more shopping with Whole Foods Market.”
And in May 2016, Whole Foods opened up the first of their lower-priced 365 by Whole Foods locations in order to attract the coveted — and perhaps more frugal — millennial buyer.
The Barclays analysts noted that Whole Foods Market “will likely stabilize,” reports Yahoo Finance, but Short isn’t convinced Whole Foods can win back their old shoppers.
"Whole Foods might face significant challenges to reverse behavioral changes even if execution improves,” says Short, “because execution at competing retailers remains very strong.”