Whole Foods Inc Shareholder Will Shake It Up Or Cut and Run

Whole Foods has long received criticisms from consumers—even those who favor the grocery chain—as heavy-handed when it comes to pricing. As a matter of fact, the company is often called “Whole Paycheck” simply because of how expensive it can be to shop there. Indeed, trying to buy healthy, natural, organic foods does, typically, carry a considerable price tag.

But while consumer demand for natural produce—and companies who favor organic brands—continues to grow, the supply chain is finding ways to make such products more accessible. That means other grocers are expanding their product lines and offering more affordable options—so much that people are starting to take their business elsewhere.

And it shows.

Apparently, Whole Foods Market Inc has been struggling, of late, and activist investor Jana Partners seems poised to make a drastic move. Whole Foods Market Inc Chief Executive Officer John Mackey now faces quite the battle with the investor group, as they are threatening to shake of the board of directors and overhaul the whole of the operation; they might even be looking to sell their stakes.

Highlighting the company’s lagging performance, Jana Partners has brought in various retail and food industry bigshots to try to save the struggling brand. This include former CEOs from companies like Gap Inc and Harris Teeter. In fact, the investment group even brought in food author—and former New York Times columnist—Mark Bittman to consult. Many speculate this is an obvious dig that Jana wants to get down and dirty, so to speak, with organic produce.

Motley Fool analyst Asit Sharma comments on this personnel choice, saying: “Bittman can provide tremendous leadership in understanding how to appeal to Whole Foods’ core customer. They want to see if there’s a way to both improve execution and polish up a brand that’s lost more than a bit of its luster.”

So far, it looks like the move has been a positive one. On the heels of the hiring spree, Whole Foods shares improved by 10 percent, a modest jump—and their biggest rally in nearly three years. Before this jump, the stock had only climbed up 1 percent over the whole of 2017, falling well behind the Standard & Poor’s 500 Index advance of 5.2 percent. Indeed, investors are betting big on Jana to fix the company (or sell it off at a good price).

Leave a Reply

Your email address will not be published. Required fields are marked *