Is the Whole Foods Brand Losing its Mojo?
June 6, 2008 ‐ 1 comment


John Mackey, the legendarily combative CEO of Whole Foods Markets (NASDAQ: WFMI) is back. Back to blogging, that is after an 11-month self-imposed hiatus while the SEC considered whether his two thousand + Yahoo! posts under the anagram “rahodeb” (borrowed from his wife Deborah Morin) violated securities regulations.

Equal parts enfant terrible and éminence grise, Mr. Mackey seems surprised by all the fuss, but he's emphatically not contrite, arguing that his posts were a “mistake of judgment, not ethics.” Excerpted out of context or no, Mr. Mackey did not mince words. A front page Wall Street Journal article reported his assessment of then competitor Wild Oats: “OATS has no value and no future” (he later acquired the company for $565 million + $106million of assumed debt). Nor did he hesitate to laud himself in the third person, “While I'm not a ‘Mackey groupie’. . . I do admire what the man has accomplished.” He even commented on his new haircut showcased in the Whole Foods annual report: “I think he looks cute.”

Mr. Mackey’s posts may be merely a byproduct of a positive self-image cultivated through healthy vegan living, yoga and mediation. But whether innocent fun, vainglorious hubris or something worse, there is a deeper problem afoot with the Whole Foods brand: it has strayed from its fundamentals. What began as a laudable commitment to quality foods and sustainable practices has become a parody of preciousness. Celery sticks for $3.99 a pound. Eight pounds of the chain’s “365 Everyday Value Holistic Dog Food” for $13.99. Your choice of salmon, poached or “Asian Barbeque”: $21.99 a pound. Even “Natural Charcoal Briquettes” exclusively made from eucalyptus: 2.25 kg for $6.99.

No one would suggest that Whole Foods should try to be the next Food 4 Less, but at some point quality and value started sleeping in separate beds. Even those who can afford a $7 pineapple are beginning to ask why they shouldn’t pick up an equally succulent and delicious – and equally “conventionally grown” (Whole Foods-speak for non-organic) – Ananas Comosus at Costco for $2.79. The chain needs to restore some rationale to why it should and does command a premium. A pioneer in humane farming. Organic food before it was fashionable. Engaged, knowledgeable “Team Members” who have helped the company land on Fortune’s Best Places to Work list since they started the ranking over a decade ago. One respondent post to Mr. Mackey’s non-mea culpa blog put it this way: “I still shop at Whole Foods, but I find the prices going up, and the quality going down and it worries me. Get back on track guys!!!”

British retailing colossus Tesco has launched its Fresh & Easy concept in the US with echt Whole Foods touches like low-power LED lighting and preferential parking for hybrid cars. David Lannon, a regional president for Whole Foods has acknowledged Tesco as a “wake-up call to the rest of the supermarket industry, including us.” And with Trader Joe's planning more expansion – including a new store just three blocks from my neighborhood Whole Foods – maybe Mr. Mackey should be rethinking his brand’s “Whole Story” instead of bear baiting his detractors in his revitalized blog.

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Ziminski Weinzinger
June 10, 2008 2:43 pm
Wow! I don't think I'll be patronizing Whole Foods anymore. I have always been amazed at the prices, but figured it was worth paying the price for health. Now that I find Mr. Mackey's modus vivendi is suspicious, Trader Joe's seems more appealing. I also find CostCo a very satisflying experience, because I always find there something I didn't know I needed. Keep up the blogging. Sock it to'em.

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