Dive Brief:
- Whole Foods Market Inc., may be in for a fight with shareholders soon, according to The Wall Street Journal.
- Despite naming new board members to provide advice on potential acquisitions, rumors swirl that investors are skeptical the new additions will create the change needed.
- Whole Foods’ stock has decreased nearly 50% in value since peaking in 2013. Last week, it rose 2.1%.
Dive Insight:
Whole Foods, which has been struggling with the longest sales slump since the natural grocer went public in 1992, expects a team of new board members with deep experience in retail and finance will help it solve some problems.
Pressure on the company has continued to build. Much of it is driven by two major shareholders — activist investor Jana Partners and mutual-fund manager Neuberg Berman, which currently collectively own more than a 10% stake in the company — who are urging the company to explore a possible sale.
The investors also are demanding Whole Foods deploy many conventional retail strategies it has resisted over the years. In April, Jana Partners said it is trying to get the retailer to start initiatives like centralized purchasing and loyalty cards.
Not that the retailer has been oblivious to its financial and business plight. Whole Foods has already begun implementing strategies from the standard grocery playbook, including layoffs, price cuts, TV advertising, coupons and target pricing promotions.
Still, it’s not enough, according to analysts following the situation. Whole Foods reported another quarter of sales declines in April, dropping 2.8%.
The retailer's new board is made up of people who are not necessarily Whole Foods loyalists — and who may be more comfortable with making big changes to the store's operations. It will be interesting to see what happens as they start their decisionmaking roles, and works toward getting the natural retailer back into the black.