When a 25-year-old college dropout named John Mackey opened a natural foods store he dubbed “Saferway” — a pun on “Safeway” — in 1978, finding food grown without pesticides was a challenge. Today, not so much.

Indeed, everyone from Walmart (WMT) to conventional supermarket chains such as Safeway (SFY) sells organic and natural produce. No wonder that sales of these products topped $81.3 billion in 2012 and will do continue to rise at double-digit rates over the next few years.

Unfortunately, that’s bad new for Whole Foods (WFM), where Mackey is now co-CEO.

WFM stock is getting pounded because the Austin-based chain reported disappointing results, missing Wall Street revenue for the sixth straight quarter. Worse still in the eyes of Wall Street has to be Mackey’s apparent unwillingness to accept the fact the world has changed.

Consider this remarkable exchange from yesterday’s earnings conference call between JPMorgan analyst Ken Goldman and Mackey (transcript provided by Seeking Alpha).

Goldman: I’ve got to be honest. I’m not really hearing anything that’s suggesting management is taking this situation as seriously as some investors want you to. There’s a lot of talk about what’s going, not a lot to talk about what it takes to win the change market. I’m really just curious what are you doing differently versus a year ago other than taking your cost down, which I think the market’s telling you may not be enough anymore?

Mackey: Well, we’re lowering prices. We’re making investments on price. We’re cutting expenses. And we’re…

Goldman: You’ve been doing that for years. You’ve been taking price down for years. I mean, it’s hard to understand.

Mackey: No, we haven’t. I mean, if you look we had rising gross margins for the last five years. So we haven’t been investing in price as aggressively as we probably needed to do.

Judging from the pounding WFM stock continues to take, Wall Street wasn’t satisfied with Mackey’s explanation — nor should it be. In fact, were it not for Mackey’s history, Whole Foods would have shown him the door.

Shares of Whole Foods stock are in free fall. Though eventually, they may become too cheap for investors to ignore, it’s hard to say when that momentous event may arrive. WFM stock remains way too expensive, trading at a forward price-to-earnings multiple of about 31, more than double Kroger’s (KR) 14 level and in line with Safeway’s 32 multiple.

The company also slashed its 2014 earnings guidance for a third time as it continues an aggressive expansion plan. In fiscal 2009, Whole Foods added 15 new and acquired stores. Whole Foods plans to add another 37 stores in fiscal 2014 and 42 in fiscal 2015. Whole Foods also released its “vision” through 2018 and — surprise — more stores are coming: 46 in 2016, 50 in 2017, and 55 in 2018.

I don’t know what’s more surprising — the fact that WFM is planning for the long-term future when its near-term present is so challenged, or that Whole Foods is ramping up store openings as its profit margins get crushed. Indeed, gross profit margins declined a whopping 51 basis points to 35.9 percent of sales during the most recent quarter.

Whole Foods desperately needs to shed the “whole paycheck” image that has dogged it for years. It needs to reach consumers who don’t need to know the name of the cow that was responsible for their milk and may not see the point of feeding their dogs free-range chicken.

In other words, it needs to appeal to normal, average consumers. That won’t be easy.

As Bloomberg News noted, Kroger is pushing its Simple Truth line, and Target’s (TGT) line of healthy food is growing by leaps and bounds. Safeway has gotten out in front of the issue of labeling products with genetically modified organisms, promising implement the practice in its stores by 2018. Rivals such as Trader Joe’s and Sprouts Farmers Market (SFM) continue to expand and Walmart — yes, Walmart — recently announced a partnership with Wild Oats to expand its organic food offerings.

How these trends will affect WFM over the long run — which is how Mackey prefers to look at things — is hard to say. While it is good news that organic/healthy foods are now mainstream, it means that they aren’t all that unique … and certainly not worth going out of your way to find your nearest Whole Foods. If you live near one, though, pay it a visit. You’ll likely find lots of good deals on price.

But take a pass on WFM stock.

At the time of publication, Jonathan Berr did not own shares of the aforementioned stocks.