Shelly Banjo is a Bloomberg Gadfly columnist covering industrial companies and conglomerates. She previously was a reporter at Quartz and the Wall Street Journal.

Whole Foods Market Inc. just bought itself a longer shelf life.

The grocery chain is in the thrall of activists who now collectively own more than 10 percent of it, while being stalked by opportunistic buyers such as Albertson's Co., which are reportedly angling to pounce on the company while it's stumbling.

After initially resisting change and largely ignoring calls to shake up management and get its house in order, Whole Foods finally seems to be responding.

The company on Wednesday announced a major overhaul of its board, the second recent sign it is finally taking years of criticism and advice to heart. The first indication came earlier this year, when it disbanded its costly and confusing co-CEO structure.  

The lineup of of retail heavy hitters joining the board includes former Foot Locker Inc. CEO Ken Hicks, Panera Bread Co. founder Ron Shaich, and former Best Buy Co. Inc. CFO Sharon L. McCollam -- who should get credit for helping to engineer that chain's turnaround after critics had left it for dead. This should bolster investor confidence in Whole Foods. So should the appointment of a new chairman and a new, experienced CFO with stops at Kohl's Corp. and Nike Inc.

Whole Foods shares rose 3 percent on the news, even as the company cut its full-year earnings forecast. Whole Foods shares are up 18 percent so far this year, mostly fueled by deal chatter. 

Hungry For More
Whole Foods shares have run up 20% in the past year, thanks partly to deal rumors
Source: Bloomberg

The company also raised its quarterly dividend and authorized $1.25 billion in new share repurchases. That's another bonus for investors, but an odd use of cash at a time when Whole Foods needs all the money it can get to rejuvenate stores and restore positive sales growth. 

Not only does Whole Foods face restructuring costs, it must rejigger its marketing, labor, technology, and operations to climb back to the top of an industry it transformed by pioneering healthy, organic, and prepared foods. Now that its competitors carry similar fare, Whole Foods has to work much harder to give people a reason to shop in its stores. 

It won't be easy. 

The company's quarterly sales dropped by 2.8 percent from the year before in the latest quarter, driven mostly by declining store traffic. Comparable sales are down 2.6 percent through April, compared with the year before, leading the company to cut its full-year outlook. It expects 2017 EPS of $1.30, down from earlier guidance of $1.33. And it doesn't expect to return to comparable sales and earnings growth until the end of 2018. 

Empty Stores
Whole Foods' sales have slipped primarily because fewer shoppers are coming in
Source: Bloomberg

A successful turnaround has to start with solid leadership. So kudos to Whole Foods for replacing an entrenched board with people who can shake things up. But unless the numbers start to change, the pats on the back won't last long.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Shelly Banjo in New York at

To contact the editor responsible for this story:
Mark Gongloff at