Can Whole Foods recover from its brand crisis?

Whole Foods stock is down 41 percent this year and, as investors start to question the company's future growth potential, a branding crisis with consumers is brewing.

In June, New York City's Department of Consumer Affairs released a report that alleged Whole Foods was overcharging customers. That expose only accentuated what their customers knew — this place is expensive.

But it wasn't just limited to New York City: On a conference call with analysts recently, Whole Foods CFO Glenda Flanagan admitted those negative news stories in New York led to lowered sales across the country.

The Whole Foods box at a Whole Foods Market in San Francisco, California.
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The Whole Foods box at a Whole Foods Market in San Francisco, California.

So what can Whole Foods do to turn around the negative narrative?

When the elephant is in the room, you acknowledge it so consumers and investors see how you are aware of the problem and are trying to fix it.

Whole Foods has announced it will be opening a chain of lower-priced organic stores under a new brand, "365," likely aimed at competing with Trader Joe's.

But that doesn't address the image Whole Foods is currently fighting over its high prices. "365" just provides a new potential competitor from within, which could lower future Whole Foods earnings even more.

If Whole Foods wants to win back trust, it needs to engage in a pro-active "pricing campaign" that educates consumers on why and how they are lowering prices, while remaining true to their high quality products that made Whole Foods the pioneer in organic food.

Local news travels fast. If a story is a hit in one local market, it's likely that another local market will produce the same story a few months later. It's only a matter of time before a local consumer news producer puts the Whole Foods scales to the test somewhere else in the country. During my time in local news, I produced a story on parking lots that didn't meet the local code, leading to banged-up car doors. That story was such a hit that I produced the same story in Phoenix, Miami and New York over the course of several years. Whole Foods needs to put mechanisms in place to make sure its faulty weighting system that was discovered in New York is not happening in other markets.

Whole Foods has loyal customers who are practically brand ambassadors. They love its hot lunch bar and they preach how the quality is better than other supermarkets. These are the customers who need to be given a microphone. Everyone has a critic, but when it comes to branding or image, businesses need to give the ambassadors a larger voice than their critics. After all, it worked for Apple. Whole Foods needs to place a special emphasis on these loyal customers in the social media world. I'm not privy to their ad budget, but a reallocation from print to social media might be worth considering.

Just as every tomato has a limited shelf life, Whole Foods also has a limited amount of time to make changes. If it doesn't adapt to the new competition, that one bad tomato might just end up ruining the rest of the batch.

Commentary by Mark Macias, head of Macias PR, a global public relations firm that has run media and branding campaigns for politicians,tech start-ups, financial firms, nonprofits and companies. He's also author of the book, "Beat the Press: Your Guide to Managing the Media." Follow him on Twitter @markmacias.