John Mackey Will be Sole CEO of Whole Foods Market

Whole Foods Market Inc. said Wednesday it was eliminating its dual-CEO leadership structure at the end of the year, leaving co-founder John Mackey alone atop the struggling grocery chain.

Mr. Mackey's co-CEO, Walter Robb, will step down from the position on Dec. 31 and remain on the board of directors and as a senior adviser to the company. Mr. Robb has shared the chief executive duties for the past six years of his 25-year career with Whole Foods.

In a further shake-up, the company also said Chief Financial Officer Glenda Flanagan would retire from the post after 29 years at the end of the 2017 fiscal year. She will also continue in a senior adviser role.

Mary Ellen Coe, vice president of sales and product operations for Alphabet Inc.'s Google, has also joined the Whole Foods board.

Mr. Mackey has spearheaded a nine-point plan to turn around his stumbling company, which includes more promotional discounts in its stores and a new, less-expensive spinoff chain called 365 by Whole Foods Market.

The company has gone through a serious downturn, hurt by increased competition in the market for natural and organic foods. On Wednesday, it posted fourth-quarter results that cemented its first annual decline in same-store sales since 2009.

Aside from the increasingly crowded sector, the chain has also faced a spate of bad press, including a price scandal last year in New York that resulted in a $500,000 fine and concerns over food safety.

For the year, the company's same-store sales retreated 2.5%, wider than the 2.4% decline predicted by FactSet analysts and the 2% fall predicted by the company.

The only other time the company posted an annual slide in same-store sales was in 2009, when the metric dropped 3.1%.

For the quarter, same-store sales slipped 2.6%, above the 2% decline predicted by both the company and analysts.

Over all for the latest quarter, Whole Foods reported a profit of $88 million, or 28 cents a share, compared with $56 million, or 16 cents a share, a year earlier. Revenue rose 1.7% to $3.5 billion. Analysts surveyed by Thomson Reuters had projected 24 cents a share on $3.50 billion in revenue.

Whole Foods has cut prices, increased promotions, and started a pilot loyalty program, all of which are tactics of more mainstream players in the sector. But traditional supermarket chains have encroached into the territory of Whole Foods, with greater competition from chains like Kroger Co., Wal-Mart Stores Inc. and Sprouts Farmers Market Inc.

To boost flagging sales, Whole Foods has also followed sector trends and offered more prepared foods. But the move has contributed to food safety concerns including warnings from U.S. health authorities over a Massachusetts plant that produces prepared foods.

There was also recently fears that two cases of hepatitis A were potentially linked to the prepared-foods section of a Whole Foods location in Detroit.

Write to Ezequiel Minaya at ezequiel.minaya@wsj.com

(END) Dow Jones Newswires

November 02, 2016 18:05 ET (22:05 GMT)

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