(New throughout, adds executive comments from conference call)
By Lisa Baertlein
Nov 4 (Reuters) - Big changes are coming to Whole Foods Market Inc as the natural and organic grocery pioneer revamps its pricing and modernizes its business to fend off widespread competition and bolster same-store sales, which unexpectedly fell in the latest quarter.
The same-store sales drop hit shares, which fell 6.2 percent to $28.86 in extended trading.
In a call after the earnings release, Whole Foods executives laid out plans to shake the chain's high-price "Whole Paycheck" reputation without sacrificing its position as a high-quality retailer.
"Some would say that increasingly everyone is selling the same food and that price is all that matters," co-Chief Executive John Mackey said on a conference call with analysts.
"We are going to be competitive on price where we need to be, but, first and foremost, the Whole Foods Market brand stands for the highest quality, selection, and service," Mackey said.
The Austin, Texas-based chain, whose mainstream competition includes retailers such as Kroger Co, Wal-Mart Stores Inc and Trader Joe's, plans to launch a chain of smaller, more value-focused stores next year.
Existing efforts to lower prices at Whole Foods have squeezed profits at the chain, which recently cut more than 2,000 jobs to reduce costs.
Unlike traditional grocery stores that tend to centralize operations, Whole Foods' individual markets for decades have had far greater freedom to choose what they sell.
The company is exploring centralized purchasing for packaged foods and other "center store" products, but plans to continue regional buying of produce, seafood and other perishables that are a point of differentiation for the chain, executives said.
It is investing in new cash register systems that should keep check-out lines moving faster and track inventory. It also is testing a loyalty program, competitive price-tracking tools and digital promotions.
Whole Foods' customer visits were down for the fourth quarter that ended Sept. 27, contributing to a 0.2 percent decline in same-store sales. Analysts polled by Consensus Metrix expected a 0.7 percent rise.
This quarter's same-store sales through Nov. 1 were down 2.1 percent.
Those sales were up 1.3 percent for the third quarter, 3.6 percent in the second quarter and 4.5 percent in the first quarter of 2015.
The retailer's fourth-quarter net income fell by more than half to $56 million, or 16 cents per share.
Whole Foods also announced a $1 billion stock buy-back program, dividend increase and capital structure plan. (Reporting by Lisa Baertlein in Los Angeles; Editing by Alan Crosby, James Dalgleish and David Gregorio)