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 (1980-09-20) in Austin, Texas
Founder John Mackey
Headquarters Austin, Texas, United States
Number of locations
 435 (September 2016)[1]
Key people
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
 91,000[1]
Website www.wholefoodsmarket.com
Whole Foods headquarters in Downtown Austin

Whole Foods Market Inc. is an American supermarket chain exclusively featuring foods without artificial preservatives, colors, flavors, sweeteners, and hydrogenated fats.[4] It is the United States' first certified organic grocer, which means it ensures, to National Organic Program standards, organic integrity of the heterogeneous products from the time they reach stores until they are placed in a shopping cart.[5] It opened on September 20, 1980, in Austin, Texas,[6] its current headquarters. As of September 2015, it has 91,000 employees and 431 supermarkets in the United States, Canada, and the United Kingdom,[1] and has its main produce procurement office in Watsonville, California.[7]

As of 2015, founder John Mackey and Walter Robb are co-CEOs of the publicly traded company, with John Elstrott as chairman.[6][8][9] In November 2016, the company announced that Walter Robb would be stepping down as co-CEO at the end of year and would remain with the company as a director.[10] It became a Fortune 500 company in March 2005 and is the 30th largest retailer in the U.S., based on 2014 revenue.[11][12]

History

Early years

In 1978, Mackey and Renee Lawson borrowed $45,000 from family and friends to open a small natural foods store called SaferWay in Austin, (the name being a spoof of Safeway). When the two 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.[13][14][15]

Two years later, John Mackey partnered with Craig Weller and Mark Skiles to merge SaferWay with the latter's Clarksville Natural Grocery, resulting in the opening of the original Whole Foods Market. At 10,500 square feet (980 m2) and with a staff of 19, the store was quite large in comparison to the standard health food store of the time.[16]

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.[16]

Expansion

The Whole Foods Market on Bowery, in Manhattan, is the largest grocery store in New York City.[17]
The produce department of a new Whole Foods Market located in the Southern Hills area of Tulsa, OK.
Whole Foods Market in Boston
A Bread & Circus and Whole Foods bakery

Beginning in 1984, Whole Foods Market expanded out of Austin by marketing more effectively to women, first to Houston and Dallas and then into New Orleans with the purchase of The Whole Food Co. in 1988. In 1989, the company expanded to the West Coast with a store in Palo Alto, Calif. 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,[18] 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.[19] 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.[20] 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.[21] 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.[22] In 2002, the company continued its expansion in North America and opened its first store in Toronto, Ontario.[23] Further continuing its expansion, Select Fish of Seattle was acquired in 2003.[24] In 2005, Whole Foods opened its 80,000 sq ft (7,400 m2) flagship store in downtown Austin. The company's headquarters moved into offices above the store.[25]

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. It also began to acquire seafood processing plants in 2003.[26] Whole Foods began opening its Hawaii stores in 2007[27] and in 2008 it opened a southeast distribution center in Braselton, Georgia, calling it the first "green distribution center" for the company.[28]

Along with new acquisitions, such as the 2014 purchase of seven Dominick's Finer Foods locations in Chicago, Whole Foods has also sold stores to other companies.[29] For example, 35 Henry's Farmers Market and Sun Harvest Market stores were sold to a subsidiary of Los Angeles grocer. Whole Foods plans to open it's first store in upstate New York in Brighton,NY(Suburb of Rochester NY). It is planned to be placed where the current Clover Lanes and Marios is once those are teared down for the Whole Foods plazza. Smart & Final Inc. for $166 million in 2007.[30]

United Kingdom

In 2004, Whole Foods Market entered the U.K. by acquiring seven Fresh & Wild stores.[19][31] 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 on Kensington High Street, West London. Company executives claimed that as many as forty stores might eventually be opened throughout the U.K.[32] 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 closed because it had "not met profitability goals".[33] In the year to September 28, 2008, the UK subsidiary lost £36M due to a large impairment charge of £27M and poor trading results due to the growing fears of global recession.[34] However, in 2011, global sales grew +8% each financial quarter as shoppers returned to the chain.[35] A first Scottish store was opened on November 16, 2011 in Giffnock, a suburb of Glasgow. Whole Foods Market Inc. currently operates 9 different Whole Foods locations: in Camden Town, Cheltenham, Clapham Junction, Giffnock, Kensington, Piccadilly Circus, Richmond, Stoke Newington, and Fulham.[36]

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.[37]

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. CEO John Mackey started a blog on the subject to explain his opposition to the FTC's stance. Further blogging by Mackey was revealed when the FTC released papers detailing highly opinionated comments under the pseudonym "Rahodeb" that he made to the Whole Foods Yahoo! investment message board. This became the subject of an investigation when the Securities and Exchange Commission (SEC) noted that Regulation Fair Disclosure law of 2000 may have been violated.[38][39] The SEC cleared Mackey of the charges on April 25, 2008.[40]

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.[41] As part of its effort to combat the ruling, Whole Foods subpoenaed financial records, market studies and future strategic plans belonging to New Seasons Market, a regional competitor based in the Portland area.[42][43] In 2009 Whole Foods agreed to sell the Wild Oats chain.[44]

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.[45] 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.[46][47]

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.[45]

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.[48] "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.[49] 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.[48]

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

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". He stated that the company would focus more on health education in its stores.[50] As of 2013, many stores have employed Healthy Eating Specialists which are team members who "answer customers’ healthy eating questions and can assist...in choosing the most nutrient-dense ingredients, suggest satisfying healthy recipes," and help "create a meal plan in keeping with your health goals."[51]

Rating systems

In an effort to allow their customers full-transparency in purchasing Whole Foods Market has developed a number of in-store rating systems for various departments. The Seafood department has a Sustainability Rating System for wild-caught seafood[52] while farm-raised seafood has to meet aquaculture standards[53] both rated in accordance to third-party auditors. The Meat department has a rating system in partnership with the Global Animal Partnership based on animal welfare.[54] The produce d epartment has a rating system based on farming practices which include measures of a farm's environmental, GMO transparency, worker safety and wage practices.[55] The grocery department has an Eco-scale rating system for its cleaning products which measures their environmental impact.[56] Each system is in place to allow customers to make the most educated choices within Whole Foods Market. There are efforts to create more rating systems in other departments.[57]

Whole Foods' Global Animal Partnership rating system has come under scrutiny from animal rights groups such as People for the Ethical Treatment of Animals (PETA) and Direct Action Everywhere (DxE) for allegedly misleading ratings and deceptive marketing.[58][59] PETA filed a class-action lawsuit against Whole Foods, "alleging that the chain's claims about animal welfare amount to a 'sham.'"[60]

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.
Orange Juice at Whole Foods Market

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.[61] Some regions have an employee known as a "forager", whose sole duty is to source local products for each store.[62]

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 the stipulation that one percent of proceeds from Whole Trade certified products 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.[63][64]

Efforts

Whole Foods Market has a policy of donating at least five percent of its annual net profits to charitable causes. Some of this mandate is accomplished through store level donations held on certain "5% days" throughout the year. The rest of it comes from various targeted projects by the company.[65]

Environmental involvement

In July 2016 they supported the anti-labelling GMO bill known as the DARK act.

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.[66] The company first began selling MSC-certified seafood in 2000, and a growing selection of MSC-certified fish continues to be available.[67]

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.[68] 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.[69]

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.[70]

On Earth Day, April 22, 2008, Whole Foods Market eliminated the use of disposable plastic grocery bags company-wide[71] in favor of reusable bags or paper bags made from recycled paper. 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".[72] 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 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.[47]

Whole Foods announced in June 2006 that it would stop selling live lobsters and crabs, but in February 2007 made an exception for a Portland, Maine store for its ability to meet "humane standards". The lobsters are kept in private compartments instead of being piled on top of one another in a tank, and employees use a device that gives them a 110-volt shock so that they are not boiled alive in a pot of water.[73] This decision was 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.[74]

In 2015, animal rights groups People for the Ethical Treatment of Animals and Direct Action Everywhere released investigations criticizing Whole Foods animal welfare standards and accusing Whole Foods suppliers of animal cruelty.[75][58] After the release of its investigation, PETA reversed its previous support for Whole Foods' animal welfare rating system, writing that "Under the guise of compassion, Whole Foods is profiting from violence against animals." [76] PETA co-founder Ingrid Newkirk criticized Whole Foods' animal welfare approach based on the DxE and PETA investigations, arguing that supposed welfare failures indicate a need for animal rights rather than welfare.[77] [78] Whole Foods has come under harsh criticism from abolitionist vegans such as Gary L. Francione who view the company's policies as a betrayal of the animal rights position.[79]

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.[80]

In February 2006, Shareholders of Whole Foods filed a resolution asking Whole Foods to report toxic chemicals found in its products.[81] 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.[82]

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."[83]

Criticism and controversies

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.[84] Parts of the debate have taken place publicly through a series of letters between Pollan and Whole Foods Market CEO John Mackey.[85]

Writer Flavio Rizzo points out to the wider implications of Whole Foods trends, bringing the case of quinoa and Bolivia where the push to produce more of the grain for the global market is altering Bolivia's ecosystem.[86]

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.[87] 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."[88] Similarly, researcher Stacy Mitchell of the New Rules Project argues that the corporation's aggressive marketing of local food is more hype than substance.[89]

Award winning journalist Chris Hedges reports that Whole Foods profits from prison slave labor. [90]

Whole Foods has frequently been the subject of resistance or boycotts in response to proposed store locations.[91][92][93][94] 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.[89]

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;[95] the editorial was controversial in the natural foods community.[96]

The company has created other controversies at various times involving business practices, labor issues, product selection, and failure to support farmers and suppliers.[97] In January 2011, they were criticized by the Organic Consumers Association for "surrendering" to agriculture companies such as Monsanto by selling GMO foods;[98] in March 2013, Whole Foods promised to label GMO-containing products in North American stores by 2018.[99] The company has drawn criticism for questionable science behind the claims of benefit of its products,[100][101] including encouraging and selling drugs that are described to work under homeopathic principles despite the fact that homeopathy is pseudoscience.[102]

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".[103][104] The company soon revised its policy.[105]

The company later agreed to pay an $800,000 settlement in response to allegations that its California stores were charging more per weight than what its labels indicated.[106] Whole Foods continued this practice despite the settlement, with investigators alleging thousands of continued violations well into 2015.[107] In 2015, the CEOs made a public admission of this happening in New York after a New York City Department of Consumer Affairs investigation.[8]

Whole Foods has faced lawsuits in California over the presence of carcinogens. In March 2008, following a study by the Organic Consumers Association, reports of high levels of 1,4-Dioxane found in body care products at Whole Foods, prompted the Attorney General of California to file a lawsuit against the company for a violation of Proposition 65.[108] Civil penalties of up to $2,500 a day were expected to be awarded. The action claimed that 365 along with brands sold by other cosmetic companies did not include a label warning about the chemical. Spokesperson Libba Letton stated that the company did "not believe that these products represent a health risk or are in excess of California's Proposition 65 Safe Harbor level for 1,4-Dioxane" while consumer activist David Steinman urged them "to stop treating the inclusion of cancer-causing chemicals in their products as 'business as usual'".[108][109] Proposition 65 was invoked again in 2013 when the state sued Whole Foods and other retailers over the presence of lead in certain candies.[110]

In May 2014, Whole Foods launched a pilot program to sell rabbit meat in 5 of its 12 market regions.[111] Because domestic rabbits are the eighth most common pet in the United States [112] as well as an animal rescued and sheltered alongside cats and dogs, this decision triggered a nationwide boycott of Whole Foods by the vegetarian activist House Rabbit Society and their supporters.[113] In June 2014 Whole Foods awarded a financial grant to Oz Family Farms,[114] a family-owned rabbit meat business.

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".[115]

Whole Foods rezoning petition regarding protected wetlands

In January 2016, SJ Collins Enterprises, a developer who often works with Whole Foods, petitioned the Sarasota County board of county commissioners to allow the removal a 5-acre protected wetlands[116][117] so that they could build a surface parking lot for a planned Whole Foods shopping center and Wawa gas station at the intersection of University Parkway and Honore Avenue. The county commission voted 4–1 to allow the rezoning and accept 41 acres of replacement wetlands.[118]

The lone commissioner voting against the proposal, Charles Hines, stated that approval of the petition could create a domino effect leading to the destruction of other protected areas.[119] He also referred to discussions with county staff members before the commission during the deliberation, such as senior manager Matt Osterhoudt, confirming the health and function of the wetlands and the staff assessment that the comprehensive plan of the county did not allow for the destruction of a wetlands in that condition. Commentators beginning with Tom Lyons responded by expressing their outrage.[120][121]

Awards and recognition

Whole Foods Market has been included in Fortune magazine's annual list of the "100 Best Companies to Work For"[122] every year since the list's inception in 1998, most recently at number 44 in 2014.[123] The chain has also won a number of awards for social responsibility including a first-place ranking by Harris Interactive / The Wall Street Journal in 2006[124] and past spots on the "100 Best Corporate Citizens" list published by Corporate Responsibility Officer.[125] In 2014, Supermarket News ranked Whole Foods number 19 on its list of "Top 75 North American Retailers" and British trade magazine The Grocer named it the "World's Greatest Food Retailer" in 2006.[126][127]

A Whole Foods Market in Markham, Ontario.

Labor relations

Among its core values, the company lists "supporting team member happiness and excellence".[128] 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 $20 per paycheck for themselves (spouse and dependent coverage is offered for an additional charge).[129] Workers also have access to a company-funded personal wellness account, and the starting pay at most stores is highly competitive.[130]

Whole Foods Market suburban store in Redwood City, California

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. Once an employee has met the deductibles, insurance covers 80% of general medical costs and prescriptions but not for any type of mental illness.[131] CEO Mackey drew attention to the insurance program (offered through United Health Care in the US) for its employees in an op-ed in The Wall Street Journal.[95] In the article he called his company's insurance plan a viable alternative to "Obamacare". 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 was created in response to John Mackey's position on health care.[132]

Mackey, a libertarian, believes that unions facilitate an adversarial relationship between management and labor.[15][133] 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.

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.[134] 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.[135]

On September 28, 2015, Whole Foods announced layoffs of 1,500 jobs, which is 1.6 percent of its workforce, in an effort to lower prices. The eliminated jobs would come from regional and store positions over the next two months.[136]

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

To help employees learn about products, the company has instituted a mentoring program and developed an online portal called "Whole Foods Market University" to aid in training. Internal parlance refers to "team leaders” as opposed to “managers” and stores sometimes offer prizes for competing teams.[137] A 2014 analysis of 2012 figures found that Whole Foods Market was "among the least generous companies" in terms of its 401k savings program.[138]

Whole Foods Market has an employment discount. While all employees are provided a standard base discount rate of 20% on all store purchases, higher rates, up to 30% can be earned based upon employee physical fitness health tests that are given yearly.[139] 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. This led to the Federal Trade Commission challenging the eventual merger with Wild Oats on the basis that it violated antitrust laws, essentially eliminating competition and inflating prices in the health foods market.[140]

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.[141] Individual stores then decide which approved products to stock. They have a rolling ten-year distribution arrangement with UNFI.[142]

365 By Whole Foods Market

365 by Whole Foods Market
Founded June 2015 (2015-06)
Number of locations
 3 (September 2016)
Website www.365bywfm.com

In June 2015, the company announced a millennial-focused, and more affordable version of its regular stores, called "365 By Whole Foods Market".[143][144][145] In addition to using digital price tags, in-store communication will largely be done through a smartphone app. In addition, the stores will have the goal of zero waste, donating all leftover food and using LED lights, as well as carbon dioxide-powered refrigeration cases.[146] Jeff Turnas is president of the division.[147]

To cut cost, customer unload bulkier products directly off a pallet.[148] Some items, like produced are priced per item instead of by weight. For items that are still sold by weight, the customer weigh, barcode, and tag those items before that reach the check-out counter.[149] Unlike the regular stores, the 365 stores offer a rewards program.[149]

The first 365 By Whole Foods Market store opened in May 2016 in the Silver Lake neighborhood of Los Angeles.[150][151][152] A second location opened two months later in Lake Oswego, Oregon in July[148][153] followed by a third store two months after that opened in Bellevue, Washington in September of the same year.[154][155] Other future locations include stores in Texas,[156] Illinois,[157] Indiana,[158][159] Ohio, Georgia, and Florida.[149]

In reviewing the new retail format, a reporter for The Motley Fool wrote that the new stores were "closer to a combination of a fruit stand, convenience store, and a restaurant than a traditional grocery store"[160] while a MarketWatch reporter called them "hipster havens" due to their cool use of high tech as a cost cutting and efficiency measure.[156] Most reviews were very positive although a few customers said that they miss talking to a person when placing food orders via tablets.[161]

See also

References

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  2. 1 2 3 4 5 6 Whole Foods Market Inc. 2013 Annual Report Form (10-K) (XBRL) (Report). United States Securities and Exchange Commission. 2013-11-22.
  3. 1 2 3 4 Whole Foods Market Inc. 2014 Q2 Quarterly Report Form (10-Q) (XBRL) (Report). United States Securities and Exchange Commission. 2014-05-16.
  4. ↑ "Quality Standards". Whole Foods Market.
  5. ↑ "Your Certified Organic Grocery Store". Whole Foods Market.
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  7. ↑ "US National Offices". Whole Foods Market. Retrieved 2015-08-27.
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  32. ↑ Bowers, Simon (2009-08-03). "Green store Whole Foods 36 million pounds in the red". The Guardian. Retrieved 2015-08-27.
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  84. ↑ Shapin, Steven (2006-05-15). "Paradise Sold". The New Yorker. Archived from the original on 2006-06-13.
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  117. ↑ Short, Jack (2015-12-16). "Whole Foods project may get bogged down". Sarasota Observer (East County ed.). with a recap of the 1999 court ruling to preserve the land
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  119. ↑ Hackney, Rachel Brown (2016-01-28). "Whole foods planning on new store opening in the summer of 2017". Sarasota News Leader. including many graphics delineating the proposal
  120. ↑ Lyons, Tom (2016-01-27). "Lyons: Wetland to become Whole Foods parking lot". Sarasota Herald Tribune. Sarasota, Florida.
  121. ↑ "There is a lot of growth; we can't stop it anymore". Sarasota Vision 2050 (blog). Sarasota, Florida: Citizens for Sarasota County. 2016-01-27.
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  125. ↑ Upham, BC (2010-03-25). "CR Magazine's 100 Best Corporate Citizens "Way Off Base"". TriplePundit. Retrieved 2015-08-27.
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  130. ↑ Maloney, Field (2006-03-17). "Is Whole Foods Wholesome? The dark secrets of the organic-food movement". Slate. John Mackey, the company's chairman, likes to say, "There's no inherent reason why business cannot be ethical, socially responsible, and profitable." And under the umbrella creed of "sustainability", Whole Foods pays its workers a solid living wage—its lowest earners starting at $10.00 per hour and after several years of employment average $13.15 an hour. Although Mackey's stance on unions, as well as employment benefits as well as a substantial wage, there is, however two sides two the coin as "Team Members" could potentially be terminated for the most minimal things, such as having a bad day. Leadership at times has overly high expectations and has no human emotion, people skills and thinks of little mistakes as crucial grounds for termination. Whole Foods Market has a point policy with its employees where it is understood and advocated that this point policy effects everyone equally, but in reality it is up to leadership as to how much they want to enforce it.—
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  140. ↑ "FTC Consent Order Settles Charges that Whole Foods' Acquisition of Rival Wild Oats was Anticompetitive" (Press release). Federal Trade Commission. 2009-03-06. Retrieved 2012-10-18.
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  144. ↑ Yu, Roger (2015-06-11). "Whole Foods to name new 'streamlined' chain 365". USA Today. Retrieved 2016-05-20.
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  146. ↑ Peters, Adele (2016-04-11). "Whole Foods Is Launching A Budget Store That Will Aim To Be Sustainable And Zero Waste". Co.Exist. Retrieved 2016-05-20.
  147. ↑ Kessler, Sarah (2016-05-16). "The Whole Foods Playbook For Reaching New Markets". Fast Company. Retrieved 2016-05-20.
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  149. 1 2 3 Saelinger, Tracy (2016-07-18). "How do Whole Foods' new 365 grocery stores compare to Trader Joe's?". NBC Today Show.
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  152. ↑ Masunaga, Samantha (2016-05-25). "First 365 by Whole Foods opens in Silver Lake. See how the prices compare". Los Angeles Times.
  153. ↑ Marum, Anna (2016-07-13). "Whole Foods' 365 in Lake Oswego: What you need to know before you shop". The Oregonian.
  154. ↑ Tu, Janet I. (2016-06-22). "Whole Foods to open Bellevue's 365 store in September". Seattle Times.
  155. ↑ Garnick, Coral (2016-09-14). "The new 365 by Whole Foods in Bellevue is open. Here's a peek inside". Puget Sound Business Journal.
  156. 1 2 French, Sally (2015-07-31). "Cheaper Whole Foods '365' stores will be in hipster havens". MarketWatch.
  157. ↑ Trotter, Greg (2016-02-11). "Whole Foods' 365 store coming to Evergreen Park". Chicago Tribune.
  158. ↑ Christian, Kurt (2016-03-29). "365 by Whole Foods Market on way to College Mall". Bloomington Herald-Times. (subscription required (help)).
  159. ↑ "New stores coming to the Bloomington mall". WISH-TV. 2016-03-29.
  160. ↑ Orelli, Brian (2016-06-01). "First Impressions of the New 365 by Whole Foods Market Inc. Concept: A Fool provides a detailed walkthrough of the company's new smaller store format, which debuted in Los Angeles late last month.". The Motley Fool.
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