John Mackey will be the sole CEO going forward for Whole Foods Market, the Austin, TX-based organics and natural foods chain that he founded in 1980. The shift comes as the early pioneer in the organic and natural foods sector has battled increased competition. With that move, co-chief executive Walter Robb, 62, will be leaving the company on December 31. Robb, who joined WFM in 1991 and for the past six years has served as co-CEO with Mackey, will remain on the Whole Foods board and continue to serve as chairman of the Whole Foods Kids Foundation and Whole Cities Foundation. He will receive a $10 million lump payment and, according to an SEC filing, will be allowed to own and operate a single retail store or coffee shop with his family in certain limited circumstances, which would not violate his non-compete agreement with Whole Foods.
“Under Walter’s leadership, Whole Foods Market has grown from 12 to 464 stores in three countries. He has been instrumental in accelerating investment in our digital strategy and technology transformation to meet the ever-changing retail landscape,” John Elstrott chairman of the Whole Foods board, said in a statement.
Also stepping down next year will be chief financial officer Glenda Flanagan who will retire on September 29, 2017. She has been with WFM for 29 years and is the longest-serving female CFO among all Fortune 500 companies.
Earlier on the same day that it announced Robb’s pending departure (November 2), Whole Foods released its fourth quarter earnings, which rose from $56 million last year to $88 million for the period ended September 25. However, same store sales fell 2.6 percent last quarter, the company’s fifth consecutive quarter of decline. Whole Foods said it expects overall sales to grow 2.5 to 4.5 percent in fiscal 2017.
“In a year that presented many headwinds for food retailers, we made measurable progress on positioning our company for continued success while producing industry-leading sales per gross square foot and healthy returns on invested capital,” Mackey, 63, said in a statement.
The upscale merchant also announced that it would open its first “365 by Whole Foods Market” in the state of Virginia, a 30,000 square foot unit in Fairfax (Lee Highway and Fairfax Boulevard) in 2017.
“365” offers a smaller footprint with lower everyday pricing and less variety than a typical Whole Foods Market. Current units opened earlier this year are located in the Silver Lake area of Los Angeles; Lake Oswego, OR; and Bellevue, WA. The retailer has announced 22 more store openings, many of them in California.
“We’re excited to bring our ‘365 by Whole Foods Market’ stores to more communities,” said Jeff Turnas, president of the new subsidiary. “Shoppers continue to look for convenient, high-quality grocery shopping experiences and we think that shoppers across the country will love this new store format.”