Whole Foods has a great business model. The problem is they are now going head to head with many regular (and much more capitalized) chains that realize people want more organic and healthy offerings. Whole Foods does win out with more of a "cult" following. As the traditional place to go for healthier/organic foods, people stay pretty loyal. The problem is future growth will be dependent on bringing other customers in the door. Also, there is a lot of pressure on pricing for them since growth in organic agriculture has been very slow compared to the vast growth in the market for it. With the Wal Marts and grocery super chains of the world have been putting out organic products under their own brands, it has limited the supply. The super chains can discount those offerings much easier than Whole Foods which depends on those specific items for the bulk of its business.
It will be interesting to see how Whole Foods adapts in this environment.