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Whole Foods announced yesterday that co-CEO Walter Robb will step down from the job at the end of year, leaving founder John Mackey as the sole CEO of the retailer. The shift, the Austin Business Journal writes, "comes as the early pioneer in the organic and natural foods sector has battled increased competition."

Indeed, as Whole Foods made the announcement about Robb stepping down, it also was saying that Q4 revenue was $3.5 billion, compared to $3.4 billion during the same period a year ago, on same-store sales that were down 2.6 percent, the fifth straight quarter in which Whole Foods saw same-store sales drop. Profit, however, for the quarter was up - to $88 million from $56 million a year earlier.

Robb, who has worked for Whole Foods for a quarter-century, has been co-CEO with Mackey since 2010. He reportedly will remain on the board of directors and as a senior advisor to the company, as well as continuing to head up the Whole Kids Foundation and Whole Cities Foundation.

In its story about the move, the Associated Press writes that "Whole Foods has been hurt by increasing competition from supermarkets, big-box retailers and grocery delivery companies that also sell organic foods and products, sometimes at cheaper prices. This year, it opened its first lower-priced 365 by Whole Foods Market store and launched a digital coupon app for its flagship stores. But the company said it will only go so far with lower prices."

Mackey said in a call with analysts that Whole Foods is "not participating in a race to the bottom,” but rather is focused on providing better customer service and promoting its “higher-quality products.”

Eater writes that one of the things that Whole Foods plans to do to reinvigorate its business is to roll out a loyalty program it has been testing to all its US stores. This "optimized rewards program," the company says, gives users "10 percent off their first purchase, a one-time offer of 15 percent off any department, and select free products throughout the year. The more customers shop at Whole Foods stores, the more rewards are unlocked."

Mackey also said the company plans to invest more in fresh food delivery options, which sounded a lot like the meal kit business that it is testing in select stores with Purple Carrot, a vegan mail kit purveyor.

In addition, Whole Foods said it remains committed to the "365" concept that is designed to offer lower prices and be more accessible to younger shoppers. There are three open at the moment - in Oregon, Washington, and California - and the company said it is still "making adjustments and tweaks to make sure we perfect '365' before we really hit the gas on new store openings."

There are 19 more 365 stores in development in various markets.

Whole Foods also announced that CFO Glenda Flanagan is leaving the company, with a planned retirement in September 2017.
KC's View:
My first thought when I heard about Robb's departure was whether the right guy was being left in charge. There's no question that it all started with Mackey, but I'm just not sure he is flexible enough to be able to steer the company through an environment in which there is a lot more competition coming from all directions. Mackey always strikes me as a purist, and I'm not entirely sure that this is the best quality to bring to the current battles.

I was chatting yesterday with a friend of mine who knows a lot about this stuff - far more than I do - and this friend agreed with me, saying that it remains to be seen whether Mackey has the marketing savvy to pull off the kind of resurgence that Howard Schultz managed at Starbucks. I think that's correct - especially because Starbucks rebounded because a) the economy improved, and b) there wasn't a ton of competition in the space at the time. Those are not the circumstances in which Whole Foods finds itself ... and I am not persuaded that the 365 concept or a loyalty program are going to be enough to revitalize the brand.

My friend predicts a train wreck. I agree.