Whole Foods Market co-founder, John Mackey, is moving back into a familiar position at the company: sole CEO, after sharing the position with Walter Robb for the past six years, the chain announced earlier this week.
Walter Robb, who’s been with Whole Foods for 25 years, will step down at the end of the year, in a decision made by the chain’s board of directors in order to refocus the retail giant. The move comes as the chain saw its first annual decline in comparable sales.
The Wall Street Journal reports that for fiscal 2016, which ended in September, "Whole Foods’ same-store sales retreated 2.5%, wider than the 2% fall predicted by the company,” explains the Journal. “The only other time the company posted an annual slide in same-store sales was in 2009, when the metric dropped 3.1%.”
Mr. Mackey told the Journal, that “competition is everywhere; everybody’s feeling it,” pointing toward the increasing competition from retailers like Amazon Fresh and the rise in popularity of meal kit delivery programs (the chain just partnered up with meal kit company Purple Carrot).
“That, coupled with lower commodity costs that kept food prices down, and lackluster consumer demand, made for a tough year,” reports the Journal.
While Whole Foods has been the clear leader in natural and organic grocery and lifestyle products over the last several decades, it has struggled in recent years not just as result of competition with more mainstream supermarkets now stocking organic and natural items.
“Whole Foods also has run into food safety concerns including warnings from U.S. health authorities over a Massachusetts plant that produces prepared foods and fears that two cases of hepatitis A were potentially linked to the prepared-foods section of a Whole Foods in Detroit,” explains the Journal.
An overcharging scandal in New York rocked the chain last year leading to steep fines and structural changes in how the company manages its prepared foods. And millennials—the company’s target market—want organic and natural food, but not at “Whole Paycheck” prices, as the upscale grocery store is nicknamed.
Efforts to attract a more budget-conscious consumer have led the chain to cut prices, jobs, and increase promotions. It launched a spinoff store, 365 by Whole Foods Market, which primarily sells its 365 private label brand of products.
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