Retail Roundup: JANA Takes Stake In Whole Foods, Sprouts Looks to Expand
Flowers aren’t the only things that will be growing this spring. Retailers like Whole Foods Market, Sprouts Farmers Market and 7-Eleven are redefining their strategies and expanding their store counts to see their profits bloom in 2017.
Jana Partners Disclose Its Nearly 9 Percent Stake in Whole Foods
Activist investor Jana Partners is Whole Foods’ second-largest shareholder with a newly disclosed 8.3 percent stake in the natural grocery chain , according to a 13D filing on the retailer’s investor page.
Jana, founded in 2001, has played a role in changing the boards of companies like Bristol-Myers Squibb Co., Tiffany & Co. and Blackhawk Network Holdings Inc. The company has reportedly not yet met with Whole Foods’ current board or executives, who were recently re-elected in February, but is expected to launch a shake up of its members. According to the filing, known activist investors with retail industry ties — including former grocery analyst Meredith Adler, former Harris Teeter CEO Tad Dickson and former Gap CEO Glenn Murphy — signed with Jana as potential board nominees.
The announcement comes at a time when in-store sales continue to decline for Whole Foods. The retailer has reportedly struggled with new technology systems to track inventory and labor scheduling. Mutual-fund giant Neuberger Berman, which owns about 2.4 percent of Whole Foods, has been pushing for faster change as well, saying the chain “hasn’t fully capitalized on its popularity among millennials or prepared foods sales, areas where it bests its rivals,” according to The Wall Street Journal.
According to the filing, JANA will touch on seven key topics with the board, including improvements to technology, operations and in-store execution strategies.
Meanwhile, the retailer announced Tuesday that its CEO John Mackey co-authored the book “The Whole Foods Diet: The Lifesaving Plan for Health and Longevity” about plant-based eating and will be launching a book tour.
Sprouts May Be Looking to New Regions
As Whole Foods struggles to maintain its sales and loyal customers, Sprouts continues to see healthy growth, even ahead of some of its competitors.
The company last week published detailed plans for 11 new-store openings in the second half of 2017 all within the chain’s existing operating regions. However, on its website, Sprouts posted two listings for real estate directors in regions where they currently have little to no presence: the Mid-Atlantic region — including Pennsylvania, Maryland, Virginia, North and South Carolina and Washington, D.C. — and a territory that includes the states of Oregon and Washington.
The expanded geography could offer brands an opportunity to widen their consumer base and scale their companies.
During its March earnings call, the grocer announced its net sales increased across the board in its fourth quarter with $986 million. Sprouts also noted its plan to open 32 new stores and enter two new states: Florida and North Carolina.
7-Eleven Adds More Than 1,100 Stores
Convenience store giant 7-Eleven is tacking on 1,108 stores after its acquisition of Sunoco locations in 18 states for $3.3 billion. The transaction is expected to close in the second half of the year, 7-Eleven’s parent company, Seven & I Holdings, announced last week. With the purchase, 7-Eleven will hold 9,815 stores in the U.S. and Canada.
C-stores are selling more snacks and prepared foods than ever before. Americans spent $550 billion last year at convenience stores, according to newly released data from the National Association of Convenience Stores. The stores have also started to embrace more healthy and fresh options for consumers.
Good Egg Returns With New Online Delivery Strategy
Good Eggs may have cracked in 2015 when the company’s rapid two-year expansion led to major layoffs, but the San Francisco-based online grocer has hatched a new plan for success.
After attracting $15 million in new funding last summer, the company has relaunched with more everyday items and same-day delivery, according to the San Francisco Chronicle. It will also sell dinner kits as of later this month.
Online grocery delivery is one of the country’s leading food businesses. The industry is expected to reach $100 billion, or 20 percent of grocery sales, by 2025, according to the Nielsen and Food Marketing Institute. And Good Egg is not the only online retailer riding this wave to seek funds. San Francisco’s Instacart raised $400 million in funding last month.
