2 days ago
Stockouts And Loyalty: Lessons From Whole Foods' Empty Shelves
Some shelves at a Whole Foods in New York City sit emptier on June 10, 2025. (AP Photo/Wyatte ... More Grantham-Philips)
Whole Foods has made progress in recent years shedding its elite image as 'Whole Paycheck.' But the specialty grocer is now facing a more down-to-earth problem: empty shelves. And that's not great for customer experience.
A cyberattack on June 5 crippled United Natural Foods (UNFI), the $30 billion grocery wholesaler that is Whole Foods Market's largest supplier. UNFI took some of its systems offline – and acknowledged in a filing that day with the Securities and Exchange Commission that the incident had 'temporarily impacted the Company's ability to fulfill and distribute customer orders.'
A June 10 photo distributed by The Associated Press (above) showed partially empty shelves at a New York City Whole Foods, five days after the attack. That left some Whole Foods customers unable to find sought-after items such as Sasanian Imperial Osetra Caviar or Nielsen-Massey Madagascar Bourbon Vanilla Extract.
Customers expect consistency in every interaction with a brand but perhaps above all in inventory.
They want what they want when they want it – and if they don't get it, they will find another retailer who has it. Research shows that millions of consumers are switching brands, a trend driven by cultural shifts that were heightened by the COVID-19 pandemic.
The immediate customer experience impact of stockouts extends far beyond a single missed purchase. In the short term, this translates to immediate revenue loss as customers pivot to competitors, often discovering alternatives they might prefer.
More damaging is the long-term erosion of trust: repeated out-of-stock experiences can result in order cancellations and returns, increased customer service costs, and brand or reputational risk. According to a study at Walden University, 'repeated stockout experiences decreased customers' loyalty to brand and retailer and caused customers to abandon both.'
In short, retailers need to avoid being viewed as unreliable.
Even though the shelf shortfalls were not the fault of Whole Foods, the chain can take some steps to at least mitigate the damage. The key is communication, more of it not less. In times of crisis, it's hard to overcommunicate as long as what you are saying has some utility. Customers want information that directly affects them and their families, and all communications should be written from that perspective.
Instead, companies often write from their own perspective, talking about all of the things 'we' are doing instead of focusing on how it benefits 'you' the customer.
Whole Foods landed somewhere in the middle. One sign spotted in a New York City Whole Foods affixed to semi-empty shelves read: 'We are experiencing a temporary out of stock issue for some products. We apologize for the inconvenience and should have your favorite products back in stock soon.'
It explains the problem, at least in general terms – and includes an apology. Even better would have been to:
The issue emerged when UNFI 'became aware of unauthorized activity on certain of its Information Technology (IT) systems,' according to the SEC filing.
The company responded by activating its incident response plan and implementing 'containment measures,' the filing said. One such measure was proactively taking some systems offline, which caused what UNFI called 'temporary disruptions to the Company's business operations.'
Nearly a week later, that meant Whole Foods and some other U.S. grocers who are UNFI customers were only being supplied 'on a limited basis.' UNFI officials told investors on an earnings call that they were working with the FBI to determine the source of the intrusion and why their defenses failed, but little additional information has emerged about the attack.
'We just got penetrated,' CEO Sandy Douglas said.
The incident was one of a growing number of cyberattacks affecting retailers and their customers.
Victoria's Secret, for example, was forced to take down its U.S. website in late May after what it called a 'security incident' that also left some in-store services unavailable. The retailer later said the incident involved its information technology systems and that the website shutdown was a precaution.
Victoria's Secret displayed this message on its home page on May 29, 2025.
And in Britain, several recent cyberattacks have taken down retail websites and led to empty shelves in at least one grocery chain.
The issues affecting Whole Foods reinforce two truisms about customer experience: the importance of supply chains and the lack of control facing companies.
Global supply chains have a major impact on customer experience, as shown once again by Whole Foods paying the price, so to speak, for problems affecting its supplier.
Since at least the 1990s, customers have wanted their favorite products faster and faster, and the supply chain disruptions of COVID heightened that trend. Customers tend to not care what's happening in the background – a shipping problem, a delivery problem, containers stuck in ports – they just want the product, fast.
And they tend to blame the company if they don't get it. Which illustrates that sometimes there are elements of customer experience that companies just cannot control.
Yet even if the issue is not their fault, it's still their problem, as Whole Foods quickly learned.
What can companies do? A few things:
Even during major crises, customer experience is still the one true competitive advantage. The Whole Foods situation demonstrates that while companies cannot control every element of their supply chain, they can control their response. And that starts with being prepared.
Retailers that emerge stronger from stockout situations are those that view these challenges not as isolated operational issues, but as defining moments that reveal their culture of customer-centricity.
Inventory issues are inevitable, so the quality of communication, the creativity of solutions, and the speed of recovery become critical components to the long-term customer experience.
Customers will forgive single negative experiences, but it's how a company responds that will stick with them and determine their loyalty going forward.
