Whole Foods Market, Inc. is shifting more responsibility from local managers and regional executives for its more than 430 stores to its Austin, Texas, headquarters. The company is deploying software to simplify labor-intensive tasks such as replenishing shelves and scheduling workers.
The natural and organic food retailer, which has long given management broad discretion over everything from buying cheese to store design, is whittling away at some of that autonomy in a bid to reduce costs and boost its clout with suppliers.
As stiffer competition erodes its profit growth, the chain is tweaking its management style by centralizing and streamlining some functions. As it looks to triple its store count by 2021, the changes could be risky for the company as it tries to squeeze more efficiency from its stores while sparing the local flavor and offerings that have been essential to its success.
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The measures are part of a broader push to beat back competition from retailers such as Kroger and Costco, which have expanded their range of natural and organic products and frequently offer them at lower prices. To lure shoppers, Whole Foods also plans to offer more discounts.
Whole Foods CEO John Mackey has acknowledged the delicacy of the streamlining effort. “We want to evolve the structure in such a way that we take out redundancy and waste. At the same time, though, we’re not diminishing the culture, the empowerment efforts that make Whole Foods Market special,” he told analysts in November.
The chain also is seeking to save approximately $300 million a year by September 2017, partly by eliminating more than 2,000 jobs, a plan it announced last fall.
