Whole Foods Market Inc. is an American chain of supermarkets that took upon itself the challenge to offer healthy products. This means that the retailer avoids putting on its shelf foods with artificial preservatives, flavors, colors, sweeteners or hydrogenated fats. The company is also the first certified organic grocer in the United States of America. Despite its high-quality products, the company faced a struggling fourth quarter with low sales. As a consequence, the retailer is going to implement some cost saving changes.
On Wednesday, Whole Foods Market Inc. announced several business decisions in light of a reported fourth quarter affected by low sales. The organic food grocer is going to close some stores. At the same time, the company is going to take full advantage of its collected customer data. Based on their studies, the organization will take all the necessary measures to improve sales. The new direction is the result of the sixth quarter in a row of sales declines.
As a consequence of a business format that doesn’t show signs of improvement, the Whole Foods Market shares dropped by 2.1% in extended trading. John Mackey, the co-CEO of the company, stated that the organization would go through an extensive reexamination. He recently remained the sole leadership of the company as his colleague Walter Robb departed from his position as a chief executive officer.
The reason behind the low performance of the Whole Foods Market is the accelerated competition. Its main rivals are Wal-Mart Stores and Kroger Co. Moreover, there are new players in this race that fight for market domination such as Amazon.com and Blue Apron, the meal kit provider. Due to low sales, the organic food grocer is going to close one commissary kitchen and a total of nine stores. In the current quarter, it is going to do more in this sector, namely closing the last two active commissary kitchens.
To gain a clear insight of their target audience, the company is going to accept a partnership with Tesco. This is a consumer data subsidiary that will help Whole Foods Market to apply important information in its efforts to retain its loyal customers. For the current year, the company will work to raise sales by at least 1.5%.
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