Dive Brief:

• United Natural Foods, Inc. (UNFI) President Chris Testa will be leaving the grocery wholesaler and retailer on Oct. 13, the company disclosed Tuesday in a filing with the U.S. Securities and Exchange Commission.
• UNFI CEO Sandy Douglas is slated to add the title of president when Testa departs.
• Testa’s termination comes as UNFI proceeds with a “transformation agenda” intended to return it to profitability and restore its standing with investors.

Dive Insight:

UNFI’s decision to sever its relationship with Testa is the latest development in the grocer’s multifaceted effort to streamline its operations and slice costs — a campaign that has taken on added urgency as the company’s financial performance has continued to rapidly deteriorate.

Testa, who served as president of UNFI’s Services division in addition to his role as president of the overall company, is leaving in connection with a move by the grocer to combine its services and wholesale platforms, Douglas said in an emailed statement.

UNFI decided to bring those divisions together as part of its effort “to improve execution and results, better align and simplify our organizational structure, and support our customer and supplier focused multi-year transformation plan,” Douglas said. Going forward, the Services group will report to Louis Martin, UNFI’s president of wholesale, according to the company.

“This alignment of our sales, services, brands, merchandising and digital teams will enable us to move with greater speed and alignment in support of the continued growth of our customer and supplier partners,” Douglas added.

In June, UNFI said it was consolidating its operating structure from four regions to three and had decided to eliminate around 150 jobs, mainly management or supervisory positions. The company has also added automation technology and added directors to its board this year in addition to making multiple leadership changes.

UNFI has been under pressure to retool its business since early 2023, when the company stunned investors with the news that top leaders were not aware that its profitability was in sharp decline, due in part to forecasting systems that were out of date. The company has seen its net income and earnings per share decline abruptly year-over-year during each of its past three quarters even as it has taken measures to reverse the slide.

Arun Sundaram, vice president of equity research for CFRA Research, said he was not surprised at the latest steps UNFI has taken to change its course.

“UNFI is in the early stages of a major transformation strategy, so it’s prudent to make these moves before delving deeper into the restructuring plan. And given that UNFI has had several operational mishaps as of late, we were bound to see changes made to the org structure,” Sundaram wrote in an email.

Testa joined UNFI in 2009 and has served as the company’s president since August 2018. He was previously president of UNFI’s Atlantic region. In March 2020, Testa added control of UNFI’s private label, supplier services, professional services and Canadian business to his portfolio.

Investors have hammered UNFI’s stock price throughout 2023 as the company has continued to post poor results. The grocer’s stock price closed Tuesday at $13.25, 70% below the $43.77 high for 2023 it reached on Feb. 2.