Whole Foods Market

"Whole Foods" redirects here. For the type of food, see Whole food. For the food cooperative, see Whole Foods Co-op.
Whole Foods Market, Inc.
Public
Traded as NASDAQ: WFM
NASDAQ-100 Component
S&P 500 Component
Industry Grocery store
Health food store
Founded September 20, 1980
Founder John Mackey
Headquarters Austin, Texas, United States
Number of locations
 404 (Jan 2015)[1]
Key people
 John B. Elstrott (Chairman)
John Mackey (Co-CEO)
Walter Robb (Co-CEO)
Jason Buechel (CIO)
Revenue
  • Increase US$ 12.9 billion (2013) [2]
  • Increase US$ 11.7 billion (2012) [2]
  • Increase US$ 883.0 million (2013) [2]
  • Increase US$ 744.0 million (2012) [2]
  • Increase US$ 551.0 million (2013) [3]
  • Increase US$ 466.0 million (2012) [2]
Total assets
  • Increase US$ 5.5 billion (2013) [3]
  • Increase US$ 5.3 billion (2012) [2]
Total equity
  • Increase US$ 3.9 billion (2013) [3]
  • Increase US$ 3.8 billion (2012) [3]
Number of employees
 58,300 (2010)[4]
Website www.wholefoodsmarket.com
Whole Foods headquarters in Downtown Austin

Whole Foods Market, Inc. is an American foods supermarket chain specializing in organic food that first opened on September 20, 1980. With stores in the US, Canada, and the UK,[5] Whole Foods Market is headquartered in Austin, Texas[1] and has its main produce procurement office in Watsonville, California.[6] Founder John Mackey currently serves as the CEO of the publicly traded company.[1]

History

Early years

In 1978, John Mackey and Renee Lawson borrowed $45,000 from family and friends to open a small natural foods store called SaferWay in Austin, Texas (the name being a spoof of Safeway). When the couple were evicted from their apartment for storing food products in it, they decided to live at the store. Because it was zoned for commercial use, there was no shower stall, so they bathed using a water hose attached to their dishwasher.[7][8][9]

Two years later, John Mackey partnered with Craig Weller and Mark Skiles to merge SaferWay with their Clarksville Natural Grocery, resulting in the opening of the original Whole Foods Market on September 20, 1980. At 12,500 square feet (1,160 m2) and with a staff of 19, the store was quite large in comparison to the standard health food store of the time.[10]

The following Memorial Day, on May 25, 1981, the most damaging flood in 70 years devastated Austin. Whole Foods' inventory was ruined, and most of the equipment was damaged. The loss was approximately $400,000; Whole Foods Market had no insurance. Customers, neighbors, and staff pitched in to repair and clean up the damage. Creditors, vendors, and investors assisted in helping the store recover, and the store reopened 28 days later.[10]

Expansion

The Whole Foods Market on Bowery, in Manhattan, is the largest grocery store in New York City.[11]
The produce department of a new Whole Foods Market located in the Southern Hills area of Tulsa, OK.

Beginning in 1984, Whole Foods Market began its expansion out of Austin, first to Houston and Dallas and then into New Orleans with the purchase of The Whole Food Company in 1988. In 1989, the company expanded to the West Coast with a store in Palo Alto, California. While opening new stores, the company fueled rapid growth by acquiring other natural foods chains throughout the 1990s: Wellspring Grocery of North Carolina, Bread & Circus of Massachusetts and Rhode Island (banner retired in 2003), Mrs. Gooch’s Natural Foods Markets of Los Angeles, Bread of Life of Northern California, Fresh Fields Markets on the East Coast and in the Midwest, Florida Bread of Life stores, Detroit-area Merchant of Vino stores, and Nature’s Heartland of Boston.[12] The company's 100th store was opened in Torrance, California, in 1999.

The company started its third decade with additional acquisitions. The first was Natural Abilities in 2000, which did business as Food for Thought in Northern California.[13] After the departure of then company president Chris Hitt and regional president Rich Cundiff, Southern California region, John Mackey promoted A.C. Gallo, president of the Northeast region and Walter Robb, president of the Northern California region to Co-COO and soon after added the titles of Co-President. This led to the promotion of three new regional presidents and a new era for the company. David Lannon became president of the Northeast region, Anthony Gilmore became president of the Southwest region, Ron Megehan became president of the Northern California region. In 2001, Whole Foods also moved into Manhattan.[14] Later that year Ken Meyer became president of the newly formed South region and Whole Foods Market acquired the assets of Harry’s Farmers Market, which included three stores in Atlanta.[15] In 2002, the company continued its expansion in North America and opened its first store in Toronto, Ontario.[16] Further continuing its expansion, Select Fish of Seattle was acquired in 2003.[17] In 2005, Whole Foods opened its 80,000-square-foot (7,400 m2) flagship store in downtown Austin. The company's headquarters moved into offices above the store.[18]

Whole Foods Market's expansion has increased the need for products and processing plants. In response, the company added its 365 Everyday Value product line and purchased Allegro Coffee Company in 1997. A seafood processing plant was opened in Atlanta in 2003, the year in which Whole Foods became the United States' first national "certified organic" grocer.[19]

In 2008, Whole Foods opened its southeast distribution center in Braselton, Georgia, also making it its first green distribution center for the company.[20]

In the summer of 2013, Whole Foods opened up two brand new facilities within just two months of each other in Minnesota. The first location was in Maple Grove, Minnesota and the second was in Minneapolis, Minnesota. As of now, there are currently six Whole Foods facilities within Minnesota, which makes Minnesota the leading state in the MidWest for Whole Foods stores.

As of August 2007, Whole Foods Market plans four stores in the state of Hawaii.[21] On Oʻahu and in the City and County of Honolulu, two of these are in development in Honolulu CDP, at Kāhala Mall in Kāhala,[22] and at Ward Village in Kakaʻako.[23][24]

United Kingdom

In 2004, Whole Foods Market entered the United Kingdom with the acquisition of seven Fresh & Wild stores.[12][25] In June 2007, it opened its first full-size store, a total of 80,000 sq ft (7,400 m2) on three levels, on the site of the old Barkers department store in Kensington High Street, West London. Company executives claimed that as many as forty stores might eventually be opened throughout the United Kingdom.[26] However, by September 2008, in the wake of Whole Foods Market's financial troubles, Fresh & Wild had been reduced to four stores, all in London. The flagship Bristol branch was closed because it had "not met profitability goals".[27] In the year to September 28, 2008, the UK subsidiary made a £36M loss due to a large impairment charge of £27M and poor trading results due to the growing fears of global recession.[28] However in 2011, global sales grew +8% each financial quarter as shoppers returned to the chain.[29] A first Scottish store was opened on November 16, 2011 in Giffnock, a suburb of Glasgow. A new UK store in Cheltenham opened on November 7, 2012, creating 150 jobs.[30] Whole Foods Market Inc. currently operates 9 different Whole Foods locations: in Camden, Cheltenham, Clapham Junction, Giffnock, Kensington, Piccadilly Circus, Richmond, Stoke Newington, and most recently Fulham.[5]

Acquisition of Wild Oats Markets and antitrust complaint

On February 21, 2007, Whole Foods Market, Inc. and Wild Oats Markets Inc. announced the signing of a merger agreement under which Whole Foods Market, Inc. would acquire Wild Oats Markets Inc.’s outstanding common stock in a cash tender offer of $18.50 per share, or approximately $565 million based on fully diluted shares. Under the agreement, Whole Foods Market, Inc. would also assume Wild Oats Markets Inc.'s existing net debt totaling approximately $106 million as reported on September 30, 2006.[31][32][33]

On June 27, 2007, the Federal Trade Commission (FTC) issued an administrative complaint challenging Whole Foods Market, Inc.’s acquisition of Wild Oats Markets Inc. According to the complaint, the FTC believed that the proposed transaction would violate federal antitrust laws by eliminating the substantial competition between two close competitors in the operation of premium natural and organic supermarkets nationwide. The FTC contended that if the transaction were to proceed Whole Foods Market would have the ability to raise prices and reduce quality and services. Both Whole Foods Market and Wild Oats stated their intention to vigorously oppose the FTC’s complaint and a court hearing on the issue was scheduled for July 31 and August 1, 2007. Whole Foods Market CEO John Mackey took the unusual step of initiating a blog on the subject to explain his opposition to the FTC’s stance. Papers filed by the FTC revealed that for several years Mackey posted highly opinionated comments under the pseudonym "Rahodeb" on the Whole Foods Yahoo! investment message board, raising serious legal and ethical questions.

On July 29, 2008, the Court of Appeals for the District of Columbia overturned the district court's decision allowing the merger. The Court of Appeals ruled that "premium natural, and organic supermarkets" ("PNOS"), such as Whole Foods and Wild Oats, constitute a distinct submarket of all grocers. The court ruled that "mission driven" consumers (those with an emphasis on social and environmental responsibility) would be adversely affected by the merger because substantial evidence by the FTC showed that Whole Foods intended to raise prices after consummation of the merger.[34] In 2009 Whole Foods agreed to sell the Wild Oats chain.[35]

In October 2007, the company completed the sale of all 35 Henry's Farmers Market and Sun Harvest Market stores to a subsidiary of Los Angeles grocer Smart & Final Inc. for $166 million.[36]

On October 2008, as part of the ongoing FTC antitrust investigation, Whole Foods Market subpoenaed detailed financial records, market studies, future strategic plans, and other information from New Seasons Market, a regional competitor based in the Portland area.[37][38] CEO Brian Rohter expressed concern about handing sensitive information over to a direct competitor, and the company has filed a motion with the FTC to block the subpoena.

SEC investigation

Customers waiting in line at the Bowery Whole Foods.

The online postings of Whole Foods Market's CEO, John Mackey, became the subject of an informal inquiry by the Securities and Exchange Commission, according to The Wall Street Journal.[39] Mackey posted numerous messages on a Yahoo financial forum under the user name "rahodeb,"[40] according to a court document filed by the U.S. Federal Trade Commission and postings on Yahoo! The postings came to light during an FTC investigation of Whole Foods Market's planned takeover of Wild Oats Markets, Inc. Mackey's messages painted a bright future for Whole Foods Market Inc., the largest U.S. natural and organic grocer, and downplayed the threat posed by competitors. While it isn’t clear that Mackey violated any laws in his postings, the issue has raised numerous legal questions. The newspaper also reported the SEC was likely to examine whether Mackey’s comments contradicted what the company previously said or were overly optimistic about the firm’s performance.

The SEC considered whether or not the CEO had selectively disclosed material corporate information, which could violate a securities law passed in 2000 (known as Regulation Fair Disclosure) designed to prevent executives from sharing information with favored clients or analysts. On July 17, 2007, Whole Foods Market stated that its board had formed an independent committee to investigate the postings. The SEC cleared Mackey of the charges on April 25, 2008.[41]

California vs. Whole Foods

Reacting in part to a study released by the Organic Consumers Association (OCA) in March 2008, in addition based on their own testing, the Attorney General of California has filed a major lawsuit against personal care and household cleaning product companies whose products recently tested highest for the carcinogenic contaminant 1,4-Dioxane.[42] The California state attorney general filed a lawsuit against cosmetic companies, including Whole Foods Market Inc., for allegedly selling natural body care and household cleaning products that tested high for a cancer-causing chemical, in violation of state law. California v. Avalon Natural Food Products, No. RG08389960 (Alameda Co., Calif., Super. Ct.).[43] California’s state attorney general Jerry Brown filed a lawsuit against Whole Foods Market Inc. for failing to label its cosmetic products containing 1,4-Dioxane.[44] The suit was filed in Alameda County Superior Court on May 29, 2008.[44] Under Proposition 65, companies must label products that contain chemicals known to the state of California to cause cancer.[44] Each violation carries civil penalties as high as $2,500 a day.[45] The lawsuit states: "Plaintiff alleges that each defendant has known since at least May 29, 2004 that the body washes and gels and liquid dish soaps contain 1,4-Dioxane and that persons using these products are exposed to 1,4-Dioxane."[46] The suit names Austin-based Whole Foods Market Inc. as a defendant, which markets the 365 brand sold in the company's stores.[46] In a statement, Whole Foods spokesperson Libba Letton said the company investigated the claims and does not believe "these products represent a health risk or are in excess of California's Proposition 65 Safe Harbor level for 1,4-dioxane."[47] "These companies need to stop treating the inclusion of cancer causing chemicals in their products as 'business as usual' and reformulate before consumer confidence in the natural products and organics industry is permanently damaged," says consumer activist David Steinman who conducted the OCA study and originally exposed the presence of 1,4-Dioxane in baby bubble bath products in his book Safe Trip to Eden.[42][48][49]

Security

Whole Foods Market hires armed security personnel for some of its retail locations, either directly or contracted through security companies. Some locations hire off-duty police officers for store security.[50] Whole Foods Market hires third party security vendors[51] to issue automatic civil demands[52] in case of shoplifting. There is a strict "no heroes policy" in effect, which prohibits store employees from directly interfering with shoplifters.

Financial history

Product quality

Produce in a Cary, North Carolina store

Whole Foods Market only sells products that meet its self-created quality standards for being "natural", which the store defines as: minimally processed foods that are free of hydrogenated fats as well as artificial flavors, colors, sweeteners, preservatives, and many others as listed on their online "Unacceptable Food Ingredients" list.[59] Whole Foods Market has also announced that it does not intend to sell meat or milk from cloned animals or their offspring, even though the U.S. Food and Drug Administration (FDA) has ruled them safe to eat.[60][61]

The company also sells many USDA-certified organic foods and products that aim to be environmentally friendly and ecologically responsible. Stores do not carry foie gras or eggs from hens confined to battery cages due to animal cruelty concerns, as a result of successful advocacy by animal welfare groups. The Whole Foods Market website details the company's criteria for selling food, dietary supplements, and personal care products.[59]

According to CNN, the extent of Whole Foods Market's nutritional screening is it "doesn't carry any food containing trans fats or artificial coloring".[62]

A variety of cheeses sold at Whole Foods.

Until June 2011, body care products sold at Whole Foods Market could be marketed as organic even if they contained ingredients not listed by the USDA as acceptable for use in organic food.[63] "Products made using petroleum-derived and other synthetic or chemical ingredients, prohibited in organic foods, can be found among the organic shampoos and lotions made by Avalon, Nature's Gate, Jason Natural Cosmetics, Kiss My Face and other brands", said Urvashi Rangan, an environmental health scientist at Consumer Reports. This is because the federal guidelines that regulate organic food labeling do not apply to cosmetics.[64] Starting in June 2011, personal care products sold at Whole Foods Market were required to follow the same USDA National Organic Program standards for organic food. This required products labeled "Organic" to contain 95 percent or more certified organic ingredients.[63]

Preparing to break open a wheel of Parmigiano-Reggiano cheese at Whole Foods Market in Overland Park, Kansas

Whole Foods Market has been criticized that its products may not be as progressive as they are touted to be. Author Michael Pollan has contended that the supermarket chain has done well in expanding the organic market, but has done so at the cost of local foods, regional producers, and distributors.[65] Parts of the debate have taken place publicly through a series of letters between Pollan and Whole Foods Market CEO John Mackey.[66]

Ronnie Cummins, national director of the United States Organic Consumers Association, said that Whole Foods Market simply uses the term natural as a marketing tool.[67] Cummins concluded that "Whole Foods Market now is a big-box retailer – and it's much more concerned about competing with the other big boxes than issues of ethics and sustainability."[68] Similarly, researcher Stacy Mitchell of the New Rules Project argues that the corporation's aggressive marketing of local food is more hype than substance.[69]

In a Wall Street Journal article in August 2009, John Mackey acknowledged that his company had lost touch with its natural food roots and would attempt to reconnect with the idea that health was affected by the quality of food consumed. He said "We sell a bunch of junk".[70] He stated that the company would focus more on health education in its stores.[71]

Purchasing

Whole Foods Market has opened wine and beer shops to cater to their upmarket brand. Above, the imported beer case at a Whole Foods beer shop.

Whole Foods Market purchases products for retail sale from local, regional, and international wholesale suppliers and vendors. The majority of purchasing occurs at the regional and national levels to negotiate volume discounts with major vendors and distributors. Regional and store buyers are focused on local products and any unique products necessary to ensure a neighborhood market feel in the stores. Whole Foods says that the company is committed to buying from local producers that meet its quality standards while also increasingly focusing more of their purchasing on producer- and manufacture-direct programs.[72] Some regions have an employee known as a "forager", whose sole duty is to source local products for each store.[73]

Whole Trade Guarantee

In April 2007, Whole Foods Market launched the Whole Trade Guarantee, a purchasing initiative emphasizing ethics and social responsibility concerning products imported from the developing world. The criteria include fair prices for crops, environmentally sound practices, better wages and labor conditions for workers and premium product quality. One percent of proceeds from Whole Trade certified products will go to the Whole Planet Foundation to support micro-loan programs in developing countries. The company’s goal, published in 2007, is to have at least half of its imported products from these countries fully certified by 2017.[74][75]

Environmental record

Whole Foods placed third on the U.S. Environmental Protection Agency’s list of the "Top 25 Green Power Partners". The company also received the EPA Green Power Award in 2004 and 2005 and Partner of the Year award in 2006 and 2007.[76] The company plans on purchasing 458 gigawatt hours of wind energy credits. This will keep about 700 million pounds (300,000 metric tons) of carbon dioxide emissions out of the atmosphere. This is equivalent to taking 60,000 cars off the road or planting 90,000 acres (360 km2) of trees.

Efforts

Environmental involvement

Whole Foods plastics recycling bin at the 2011 Ann Arbor Summer Festival

In May 1999, Whole Foods Market joined the Marine Stewardship Council (MSC), a global independent, not-for-profit organization promoting sustainable fisheries and responsible fishing practices world-wide to help preserve fish stocks for future generations.[77] The company first began selling MSC-certified seafood in 2000, and a growing selection of MSC-certified fish continues to be available.[78]

A January 8, 2007, Environmental Protection Agency (EPA) report listed Whole Foods Market as the second-highest purchaser of green power nationwide, citing its actions as helping drive the development of new renewable energy sources for the electricity generation. The EPA report showed Whole Foods Market using 463.1 million kilowatt hours annually. It was covered, 100 percent net-wise, by its total electricity from biomass, geothermal, small-hydro, solar, and wind sources.[79]

Eliminating plastic

In January 2008, Whole Foods Market was the first U.S. supermarket to commit to completely eliminating disposable plastic grocery bags to help protect the environment and conserve resources and many stores serve as a collection point for shoppers to recycle their plastic bags.

On Earth Day, April 22, 2008, Whole Foods Market eliminated the use of disposable plastic grocery bags company-wide.[80] Customers can now choose between paper bags made from 100% recycled paper or from a selection of reusable bags. The company also began offering "Better Bags", a large and colorful grocery bag made primarily from recycled bottles. The move from the traditional paper/plastic system to environmentally friendly and reusable bags has been packaged as an initiative the company calls "BYOB – Bring Your Own Bag".[81] The campaign is aimed at reducing pollution by eliminating plastic bags and reducing waste by encouraging bag reuse with "bag refunds" of 5–10 cents, depending on the store.

Humane treatment of animals

In 2002, People for the Ethical Treatment of Animals (PETA) began petitioning Whole Foods to take steps to ensure the improvement of treatment of animals sold in the stores.

Whole Foods created the Animal Compassion Foundation in January 2005, a separate nonprofit organization, to help other producers evolve their practices to raise animals naturally and humanely. According to Whole Foods Natural Meat Quality Standards and Animal Compassionate Standards, pulling feathers from live ducks, bill trimming, bill heat treatment, toe punching, slitting the webs of the feet, and toe removal are all prohibited in the raising of ducks for Whole Foods Market. Any ducks treated in this manner, treated with antibiotics or antimicrobials, cloned, genetically modified, or not allowed medical treatment when necessary are to be removed from Whole Foods Market stock.[61][82]

Whole Foods announced in June 2006 that it would stop selling live lobsters and crabs, but in February 2007 made an exception for a new Portland, Maine store that is able to meet "humane standards". The lobsters will be kept in private compartments instead of being piled on top of one another in a tank, and employees will use a device that gives them a 110-volt shock so that they are not boiled alive in a pot of water. Whole Foods will not be selling live lobsters at its other stores because they are not close enough to the lobster grounds.[83] This decision has been criticized by ex-lobsterman Trevor Corson as damaging a New England tradition and as removing people's connection to where their food actually comes from.[84]

Despite Whole Foods' welfare standards, it has come under harsh criticism from abolitionist vegans such as Gary L. Francione and animal rights groups such as Direct Action Everywhere who view the company's policies as a betrayal of the animal rights position.[85][86]

Whole Foods Market has a policy of donating at least five percent of its annual net profits to charitable causes. These donations are accomplished in multiple ways. Each store has the authority to donate food, labor or dollars to local not-for-profit organizations. Individual stores also hold 5% Days approximately four times a year, during which they donate 5% of that day's net sales to a local or regional non-profit or educational organization.

In 2005, the company created two foundations designed to effect solutions to global problems. The Animal Compassion Foundation strives to improve the quality of life for farm animals and the Whole Planet Foundation works to combat poverty in rural communities around the world through microlending.[87] In 2006, the company announced that it would be providing up to $10 million in low-interest loans to local producers.[88] The Local Producer Loan Program provided its first loan in February 2007.

Toxins

In January 2004, in California, the Environmental Working Group and the Center for Environmental Health presented a notice of intent to file an anti-toxin lawsuit against salmon producers. This was in large part due to Whole Foods' involvement, including highlighting companies' failure to warn consumers the fish contained potentially dangerous levels of cancer-causing chemicals known as PCBs.[89]

In February 2006, Shareholders of Whole Foods filed a resolution asking Whole Foods to report toxic chemicals found in its products.[90] Substances such as Bisphenol A (BPA), found in products such as baby bottles and children’s cups, are controversial. Whole Foods no longer sells baby bottles and children’s cups made with BPA.[91]

In the wake of concern over the safety of seafood imports from China, on July 10, 2007, The Washington Post reported that Whole Foods imports a small amount of frozen shrimp from China, accounting for less than 2% of the company's total seafood sales. A Whole Foods spokesperson addressed the issue, saying "We're not concerned about the less than 2 percent. It's business as usual for us."[92]

Criticism and controversy

Whole Foods has frequently been the subject of resistance or boycotts in response to proposed store locations.[93][94][95][96] The corporation has also been criticized for its aggressive policy of promoting its own in house brands (e.g. 365) at the expense of smaller or local independent brands.[97]

On August 11, 2009, Whole Foods CEO John Mackey published an editorial in The Wall Street Journal criticizing the Patient Protection and Affordable Care Act;[98] the editorial was controversial in the natural foods community.[99]

The company has created other controversies at various times involving business practices, labor issues, product selection, and failure to support farmers and suppliers.[100] In January 2011, they were criticized by the Organic Consumers Association for "surrendering" to global food giant Monsanto by selling GMO foods;[101] in March 2013, Whole Foods promised to label GMO-containing products in North American stores by 2018.[102] The company has drawn criticism for questionable science behind the claims of benefit of its products.[103][104] Including encouraging and selling drugs that are described to work under homeopathic principles despite the fact that homeopathy is pseudoscience.[105]

In 2013, two workers in Albuquerque, New Mexico were suspended for speaking Spanish. The resulting investigation revealed that Whole Foods has a policy of speaking "English to customers and other Team Members while on the clock".[106][107] The company soon revised its policy.[108]

The company was later caught overcharging customers in its California stores, and has agreed to pay an $800,000 settlement.[109]

In May 2014, Whole Foods launched a pilot program to sell rabbit meat in 5 of its 12 market regions.[110] Because domestic rabbits are the third most common pet in the United States [111] as well as an animal rescued and sheltered alongside cats and dogs, this decision triggered a nationwide boycott of Whole Foods by the House Rabbit Society and their supporters.[112] In June 2014 Whole Foods awarded a financial grant to Oz Family Farms,[113] a family owned rabbit meat business. This caused opponents of rabbit meat sales to suggest that Whole Foods is artificially creating the market for rabbit meat.[112] A letter of protest was written and presented to Whole Foods Market by SaveABunny representing over 70 animal rescue organizations and businesses.[114] A petition against the sale of rabbit meat was started [115] and national protests at Whole Foods locations across the United States began in July 2014.[116]

In January 2015, a group of activists organized under the network Direct Action Everywhere (DxE) released a video of laying hens from a Northern California farm that supplies eggs to Whole Foods. In the video, which featured footage of crowded, dirty henhouses and injured birds, DxE contended that the hens' welfare was severely compromised, even though numerous boards had labeled the farm as "Certified Humane".[117]

Awards and recognition

A Whole Foods Market in Markham, Ontario.

Labor relations

Among its core values, the company lists "supporting team member happiness and excellence".[129] The company maintains that its treatment of workers obviates the needs for unions: At its U.S. stores, after 800 service hours, full-time workers are given an option to purchase health insurance coverage starting at $10 per paycheck for themselves (spouse and dependent coverage is offered for an additional charge).[130] Workers also have access to a company-funded personal wellness account, and the starting pay at most stores is highly competitive.[131]

Whole Foods Market suburban store in Redwood City, California

CEO Mackey drew attention to Whole Food's health insurance program (offered through United Health Care in the US) for its employees in an op-ed in The Wall Street Journal.[132] In the article he called his company's insurance plan a viable alternative to "Obamacare". Whole Food's health insurance plan is notable for its high deductibles – $2000 for general medical expenses, and $1000 for prescriptions. However, employees receive $300 to $1800 per year (depending on years of service) in personal wellness funds, which are intended to help make up the difference. Once an employee has met the deductibles, insurance covers 80% of general medical costs and prescriptions. It should also be noted that medications and doctor care for the treatment of any type of mental illness are explicitly not covered by the company's health insurance policy.[133] Mackey summed up his antipathy toward universal coverage in his op-ed by stating,

A careful reading of both the Declaration of Independence and the Constitution will not reveal any intrinsic right to health care, food or shelter. That's because there isn't any. This "right" has never existed in America.

A "Boycott Whole Foods" page on Facebook with more than 27,000 members was also created in response to John Mackey's position on health care.[134] Conversely, an alternative group on Facebook was set up in support of John Mackey and Whole Foods.[135]

Mackey, a libertarian, makes no secret of his opposition to unions at Whole Foods Market. Mackey believes that unions facilitate an adversarial relationship between management and labor.[9][136] An attempt at unionizing in Madison, Wisconsin, in 2002 was met with resistance from store management and Whole Foods was accused by labor activists of union busting. A 2004 ruling by the National Labor Relations Board upheld the actions of Whole Foods at the Madison store. Further attempts at unionizing Whole Foods Market stores have been unsuccessful. Michael Henneberry of the United Food and Commercial Workers Union said they failed to attract the interest of the employees at Berkeley's Whole Foods despite rallying there for seven years.[137]

Whole Foods was criticized for its refusal to support a campaign by the United Farm Workers (UFW) on behalf of agricultural workers laboring on strawberry farms.[138] During the late 1990s, the UFW persuaded several large supermarket chains to sign a pledge in support of improved wages and working conditions for strawberry pickers. Whole Foods chose instead to support the farm workers directly by holding a "National 5% Day" where five percent of that day's sales – $125,000 – was donated to organizations which provide social services to farmworkers.[139]

Management system

Employee structure and culture

Whole Foods Market consists of twelve geographic regions, each with its own president, regional administrative team, store-level leadership, and store-level team members. A 4-tier hierarchy of employment exists within the Whole Foods Company: Store Employment, Facilities Employment, Regional Offices, and Global Headquarters.

Employee benefits and incentives

Every Whole Foods Market store allots a portion of its budget to employee development and evaluation. Each employee has access to the online “Whole Foods Market University”, an online information portal that provides information to connect employees to the core values of the company and further knowledge about products. When a new employee is hired, he or she is assigned a mentor. On the store floor, the company uses a system of "team leaders” as opposed to “managers.” Each employee has the opportunity to receive further training in various departments. Every employee is provided medical, dental, vision and life insurance. As for retirement savings, all those over 18 are eligible to participate in the “Growing Your Future” 401k savings program. All employees are given a 20% discount and allotted a certain amount of paid time off. These benefits accumulate over time, motivating team members to remain with the company.

Additional benefits include a Whole Foods Market employment discount. While all employees are provided a standard base discount rate of 20% on all store purchases, higher rates, up to 30% [140] can be earned based upon employee physical fitness health tests that are given yearly. These fitness exams are taken at the option of the employee.

Company structure

In total, Whole Foods Market is composed of seventeen companies, each specializing in a different product. In the 1990s, while new stores were being opened, other natural food chain stores were being acquired for horizontal integration. There was an increased demand for natural food products, which led to further expansion of Whole Foods Market. In 2007, Whole Foods Market purchased Wild Oats Market, a main competitor of the company. The Federal Trade Commission challenged this merger on the basis that it violated antitrust laws, essentially eliminating competition and inflating prices in the health foods market.[141] However, after sufficient dissent by the courts, a compromise was reached and the merger was allowed to go forward. This merger provided Whole Foods Market horizontal integration, as well as more control over competitors and price competition in the health foods market.

Subsidiary companies and suppliers

Whole Foods Market is based on a system of decentralized buying. Each vendor is approved at the regional level for corporate standards such as being non-gmo and Fair Trade.[142] Individual stores then decide which approved products to stock. They have a rolling ten-year distribution arrangement with UNFI.[143]

See also

References

  1. ↑ 1.0 1.1 1.2 Van Allen, Peter (May 8, 2013). "Whole Foods shares surge on sales report". Philadelphia Business Journal. Retrieved May 8, 2013.
  2. ↑ 2.0 2.1 2.2 2.3 2.4 2.5 "WHOLE FOODS MARKET INC 2013 Annual Report Form (10-K)" (XBRL). United States Securities and Exchange Commission. November 22, 2013.
  3. ↑ 3.0 3.1 3.2 3.3 "WHOLE FOODS MARKET INC 2014 Q2 Quarterly Report Form (10-Q)" (XBRL). United States Securities and Exchange Commission. May 16, 2014.
  4. ↑ "2010 Form 10-K, Whole Foods Market, Inc.". United States Securities and Exchange Commission. Retrieved October 27, 2011.
  5. ↑ 5.0 5.1 "Store List - UK". Whole Foods Market.
  6. ↑ http://www.wholefoodsmarket.com/company-info/us-national-offices
  7. ↑ Smith, Evan (March 2005). "John Mackey". Texas Monthly. Retrieved October 27, 2011.
  8. ↑ Moore, John (March 21, 2005). "Run, Gun, and Have Fun – Whole Foods Market Style". Brand Autopsy. Retrieved October 27, 2011.
  9. ↑ 9.0 9.1 John Mackey on Whole Foods' Growth Marketplace, February 26, 2007.
  10. ↑ 10.0 10.1 "Whole Foods Market History". Whole Foods Market. Retrieved 14 February 2015.
  11. ↑ Media Release. Whole Foods Market, Inc. March 27, 2007. Retrieved August 25, 2008.
  12. ↑ 12.0 12.1 12.2 12.3 12.4 12.5 12.6 12.7 12.8 12.9 12.10 12.11 12.12 Company Timeline, Whole Foods Market, last accessed February 26, 2007.
  13. ↑ "COMPANY NEWS; WHOLE FOODS TO BUY NATURAL FOOD SUPERMARKET CHAIN". The New York Times. January 18, 2000. Retrieved August 15, 2008.
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