Whole Foods Market's

Slumping sales have an activist investor demanding changes

- Craig Giammona

 

With the organic grocery chain he built at a crossroads and an activist investor threatening to force its sale, John Mackey was in a Manhattan bookstore on April 13 proselytizing about the benefits of a vegan diet. The eccentric, 63-year-old Whole Foods Market Inc. chief executive officer told a small crowd that he was compelled to write his new book, The Whole Foods Diet, because the prescription he lays out— consume mostly plants while avoiding meat and processed food—will help fight chronic ailments such as diabetes and obesity. “It’s almost an ethical issue,” Mackey said at a Barnes & Noble store in the Tribeca neighborhood. “I have to say what I know.”

While Mackey lays out a cure for America’s health woes, investors are questioning whether he can fix what’s ailing Whole Foods. The grocery chain that pioneered organic food for the masses in the U.S. has been struggling through a sales slump amid steep competition in a market it once dominated. On April 10, as Mackey prepared to celebrate his book’s publication, news hit that activist investor Jana Partners LLC had taken an almost 9 percent stake in the company. The firm, which previously invested in the Safeway grocery chain before that merged with Albertsons Cos., said in a regulatory filing that it may shake up the board of directors, overhaul operations, and possibly push for a sale of the business.