Whole Foods Market announced a major shakeup of its board Wednesday, with five new directors, a new chair, and a new CFO, following its seventh straight quarter of same-store declines, announced the same day. These major management changes, which are in line with the demands that investor Jana Partners, the second largest shareholder in the company, made in April, may indicate that the organic chain is moving away from its focus on local, regional products to take on a more centralized strategy.
The Omaha World Herald reports that while in the early 2000s, it was regular policy for Whole Foods Market to seek out regional vendors at local farmers markets, “industry watchers and some local foods businesses say there will be fewer success stories like this now that Whole Foods has come under shareholder pressure to cut costs.”
“I think they’re going to lose a lot from not being able to take a run at some of these small emerging brands,” Kurt Jetta, CEO at TABS Analytics, a Connecticut consultant to packaged food companies, told the Omaha World Herald.
Keith Manbeck, former senior vice president of digital finance, strategy management, and business transformation at Kohl’s, has been named the new CFO of the chain, and Gabrielle Sulzberger, who has been on Whole Foods’ board since December 2016, has been named the new board chair.
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The five new board directors are Ken Hicks, chairman, president and CEO of Foot Locker; Joe Mansueto, founder and executive chairman of Morningstar; Sharon McCollam, former executive vice president, chief administrative, and chief financial officer of Best Buy; Scott Powers, who has held various positions at State Street; and Ron Shaich, founder, chairman, and chief executive of Panera Bread.
“The five new independent directors have distinguished track records as value creators and as experienced leaders,” said Sulzberger. “Our new directors join a board that is focused on being responsive to our shareholders and is committed to achieving the significant opportunities ahead.”
The retailer also hired a new General Counsel and Global Vice President of Legal Affairs, Heather Stern, formerly head of legal strategy behind Office Depot’s 2013 buyout of OfficeMax.
Whole Foods also outlined several other new initiatives Wednesday, including a customer loyalty program and a goal of $300 million in cost savings by the end of 2020. Though Jana Partners had also called for the possibility of Whole Foods Market putting itself up for sale, no mention was made of this Wednesday.
This managerial shakeup is in line with other recent changes made at Whole Foods Market designed to boost sales in an increasingly competitive organic market, including the launch of value-oriented 365 by Whole Foods Market stores in May of last year and the transition to a sole CEO model when Walter Robb stepped down as co-CEO late last year. The chain also closed nine stores last year in an attempt to boost slumping sales.
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