I have two Arborvitae newly planted this year. Both plants are losing a considerable amount of their leaves, the nursery says this is natural. Is this so? Do these plants lose foliage every year?

All evergreens drop their leaves periodically throughout the year, just not all at once. If the leaf loss is occurring throughout the plant and is limited to the older leaves then most likely the cause is natural leaf senescence. Leaf loss can also be caused by overly dry or wet soil conditions. Also, if the Arborvitae were planted in a shadier location then they were originally grown in, the shrubs will shed the excess leaves in response to lower light levels. These leaves will generally be from within the shrub as opposed to leaves on the outside of the shrub, which are exposed to more light.