Robb's Exit As Co-CEO Is A Big Loss For Whole Foods

Articles
November 07, 2016

Robb's Exit As Co-CEO Is A Big Loss For Whole Foods

The true expense will be the loss of Robb’s vision, experience and professionalism to the chain.

Originally published on Forbes.com.

In a surprising move, Whole Foods announced on Wednesday that 25-year veteran Walter Robb’s co-CEO position would be eliminated as of the end of the year, with Robb remaining a member of the board member and lead for two of its foundations. The move isn’t a cheap one for the company as part of his reassignment package is a lump sum payment of $10 million (and a lifetime discount at Whole Foods’ stores).

The payout will not be the major expense for Whole Foods. Robb has been a strong asset to the retailer and perhaps even more importantly a calming influence, both internally and in the media, to the now sole CEO John Mackey’s erratic and sometimes disingenuous leadership behavior. The true expense will be the loss of Robb’s vision, experience and professionalism to the chain. Clearly not a message, in my opinion, that Wall Street wants to hear.

Whole Foods’ announcement  that John Mackey will be the sole Chief Executive Officer is being positioned as a move to have Mackey refocus the organization to return to growth in the chain and to expand their 365 concept (which many including me, have questioned the direction and supposed success). Having met Robb and spoken with him a few times, I can say this is a major loss and setback for the chain, and putting Mackey in the pilot seat, without Walter as his co-pilot, may do more harm than good. 

One recalls the Whole Foods video “Weights and Pricing A Message To Our Customers”  that was published by the company on July 3, 2015 immediately following the investigation from the New York Weights & Measures where Robb came across as the solid CEO apologizing and taking responsibility as he listed the steps they would take to correct the problem; while Mackey…well, Mackey was just being Mackey.

For decades, consumers labeled the chain as Whole Paycheck; and while acknowledging that the chain offered more organics and products with free-from ingredients than others did, times have changed. Kroger, ShopRite, Hy-vee, Safeway and just about every grocery store today offers a similar assortment – but without the Whole Foods mark up – making it very hard for Whole Foods to compete.

There is no doubt that Mackey, who co-founded Whole Foods back in 1980 with three others (Robb was not part of the founding four), is a man with a vision and has been driven to evolve the way Americans eat into a his vision of a better-for-you food supply. He has been outspoken and at times come under severe criticism for his statements and actions including workers complaining of poor wages and customer overcharges in the early days of Whole Foods to writing a controversial editorial in the Wall St. Journal on his views of healthcare in the United States which actually led to boycotts of the chain by various groups. He came under the most criticism when it was discovered that he was posting negative comments about rival Wild Oats (as he was trying to acquire the chain, and eventually did) on Yahoo Finance forums under the pseudonym Rahodeb.

The supermarket business is going through major changes: consolidations, new entries and formats from Aldi and Lidl, online grocery and meal kit deliveries and most importantly a new consumer who is more involved in food than we have ever witnessed and concerned about transparency and value. Mackey has to step up his game on both fronts if he will win over these shoppers and be an effective sole-CEO.