Whole Foods Market (WFM) will soon no longer have two CEO’s, ending an enduring but unusual management practice by the grocer.
The upscale retailer said on Wednesday that co-founder John Mackey would become the sole CEO on Dec. 31, while Walter Robb will stay on as a director. Robb has been co-CEO for six years and with the company for 25. According to a regulatory filing, Robb will among other perks get a $10 million severance, and perhaps more valuable from a monetary standpoint, he gets a lifetime 30% discount on purchases made at Whole Foods.
The move will end an unusual co-CEO structure and put Mackey solely in the driver’s seat as Whole Foods expands its lower-price 365 chain and looks to return to growth in its main business. Still, Robb was credited for helping turn Whole Foods into a high-end grocery juggernaut.
“Under Walter’s leadership, Whole Foods Market has grown from 12 to 464 stores in three countries,” said John Elstrott, Whole Foods’ chairman. Whole Foods also announced that Mary Ellen Coe, Vice President of Sales and Product Operations for Google, has joined its board. There are relatively few large public companies with co-CEO arrangements, notably Oracle (ORCL) and Chipotle Mexican Grill. (CMG)
Whole Foods’ challenges look like they’ll persist for a while. Comparable sales fell 2.6% in the quarter ended Sept. 25 and continue to slip in the current quarter, dropping 1.6% through Oct. 30. Mackey said in a statement that there had been many “headwinds” in this past year for food retailers.
Whole Foods reported earnings of 28 cents, above Wall Street forecasts for 24 cents. Total revenue was $3.5 billion, in line with investor expectations. Grocers have been hit by food deflation and aggressive pricing by Walmart (WMT), the largest food retailer in the United States.
The company has been trying to attract younger customers, notably by recently beginning to test sales of Purple Carrot’s vegan meal kits, joining forces with one of many startups that threaten mainstream grocers by delivering boxed, cook-at-home meals.