Whole Foods Market To Close Three Commercial Kitchens

(RTTNews) - Whole Foods Market Inc. (WFM) will close its three commercial kitchens, where it makes ready-to-eat meals for stores, including one location which received a regulatory warning about food safety violations last year, the Wall Street Journal reported.

The decision to outsource the food preparation comes as Whole Foods works to cut costs by centralizing certain functions and reducing its workforce. Teams at its Austin headquarters are taking more responsibility for buying packaged foods for stores nationally; and in 2015, the company announced plans to cut 1,500 jobs at the regional and store levels.

It also comes two months after the company decided to eliminate its dual-chief-executive leadership structure, leaving co-founder John Mackey as the sole leader of the struggling chain. Whole Foods is facing intensifying competition as traditional stores like Kroger Co. and Target Corp. stock more natural and organic foods at lower prices.

The company reportedly said the decision to close the kitchens isn't related to the recent food safety violations.

The three commercial kitchens are in Everett, Mass., Atlanta and Landover, Md. The closures affect about 500 jobs, though the company expects most employees will find new positions within the company or with its suppliers, the report said.