Whole Foods Market
||This article appears to be written like an advertisement. (June 2013)|
|Traded as||NASDAQ: WFM
S&P 500 Component
Health food store
|Headquarters||Austin, Texas, U.S.|
|Number of locations||365 (October 2013)|
|Key people||John B. Elstrott (Chairman)
John Mackey (Co-CEO)
Walter Robb (Co-CEO)
Jason Buechel (CIO)
|Revenue||US$9.006 billion (FY 2010)|
|Operating income||US$438 million (FY 2010)|
|Net income||US$246 million (FY 2010)|
|Total assets||US$3.987 billion (FY 2010)|
|Total equity||US$2.373 billion (FY 2010)|
- 1 History
- 2 Product quality
- 3 Purchasing
- 4 Environmental record
- 5 Causes
- 6 Criticism and controversy
- 7 Awards and recognition
- 8 Labor relations
- 9 Management system
- 10 See also
- 11 References
- 12 External links
In 1978, John Mackey and Rene 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.
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.
The following Memorial Day, the most damaging flood in 70 years devastated Austin. Whole Foods' inventory was wiped out, 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, reopening 28 days later.
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. 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. 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. 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. In 2002, the company continued its expansion in North America and opened its first store in Toronto, Ontario. Further continuing its expansion, Select Fish of Seattle was acquired in 2003. 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.
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.
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[update], Whole Foods Market plans four stores in the state of Hawaii. On Oʻahu and in the City and County of Honolulu, two of these are in development in Honolulu CDP, at Kāhala Mall in Kāhala, and at Ward Village in Kakaʻako.
In 2004, Whole Foods Market entered the United Kingdom with the acquisition of seven Fresh & Wild stores. 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. 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". 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. However in 2011, global sales grew +8% each financial quarter as shoppers returned to the chain. 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.
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.
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. In 2009 Whole Foods agreed to sell the Wild Oats chain.
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. 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.
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. Mackey posted numerous messages on a Yahoo financial forum under the user name "rahodeb," 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.
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. 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.). 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. The suit was filed in Alameda County Superior Court on May 29, 2008. Under Proposition 65, companies must label products that contain chemicals known to the state of California to cause cancer. Each violation carries civil penalties as high as $2,500 a day. 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." The suit names Austin-based Whole Foods Market Inc. as a defendant, which markets the 365 brand sold in the company's stores. 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." "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.
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. Whole Foods Market hires third party security vendors to issue automatic civil demands in case of shoplifting. There is a strict "no heroes policy" in effect, which prohibits store employees from directly interfering with shoplifters.
- January 1992: Whole Foods goes public, trading shares on the NASDAQ Stock Market as WFMI.
- November 1993: WFMI stock splits 2 for 1.
- June 2001: WFMI stock splits 2 for 1.
- October 2001: Moody's upgrades WFMI debt ratings.
- May 2002: WFMI added to S&P MidCap 400 Index.
- December 2002: WFMI added to the NASDAQ-100 Index.
- January 2004: Whole Foods Market paid its first dividend ever, 15 cents on each share of the company's stock.
- November 2004: Board of Directors approves 27 percent increase in quarterly dividend to $0.19 per share.
- March 2005: WFMI joins the ranks of the Fortune 500, entering the list for the first time at No. 479.
- April 2005: Board of Directors approves 32 percent increase in quarterly dividend to $0.25 per share.
- November 2005: Board of Directors approves 20 percent increase in quarterly dividend to $0.30 per share and announces special $4.00-per-share dividend.
- December 2005: Whole Foods Market stock splits 2 for 1, the third stock split in the company’s history.
- November 2006: The company's salary cap was raised from 14 times the average pay of a full-time worker to 19 times the average pay. This is up from the original eight-times cap that was set in the late 80’s. Additionally, the company announced that CEO John Mackey will receive a salary of one dollar (started January 1, 2007), and will forgo any future stock option awards.
- November 2006: Whole Foods Market's stock dropped 18 percent after the company lowered its 2007 sales forecasts.
- August 2007: A federal judge cleared the way for Whole Foods to merge with its rival Wild Oats Markets Inc., discounting recent arguments that the reduced competition would lead to higher prices.
- March 2009: Federal judge orders the divestiture of Wild Oats Market as well as one of Whole Foods existing stores.
- December 2009: In a December 24, 2009 filing with the U.S. Securities and Exchange Commission, Co-founder and CEO John Mackey voluntarily gave up his chairmanship, a position he had held since Whole Foods' inception in 1978. John Mackey will still remain on the board of directors. The new chairman will be John Elstrott.
- May 2011: The stock symbol changed from WFMI to WFM.
- May 2013: WFM stock splits 2 for 1.
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. 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.
According to Stream Organic, they state that Whole Foods does their “homework” for their shoppers, by giving them the peace of mind that their food is free of artificial flavors, colors, sweeteners, preservatives or hydrogenated fats. Whole Foods is the largest retailer of natural and organic foods and America’s First National Certified Organic Grocer.
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. 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".
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. "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. 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.
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. Parts of the debate have taken place publicly through a series of letters between Pollan and Whole Foods Market CEO John Mackey.
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. 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." Similarly, researcher Stacy Mitchell of the New Rules Project argues that the corporation's aggressive marketing of local food is more hype than substance.
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.
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. Some regions have an employee known as a "forager", whose sole duty is to source local products for each store.
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. Whole Foods will work with TransFair USA and the Rainforest Alliance to ensure the transparency and integrity of the program. 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 is to have at least half of its imported products from these countries fully certified within ten years.
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. 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.
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. The company first began selling MSC-certified seafood in 2000, and a growing selection of MSC-certified fish continues to be available.
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.
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. 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". 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.
CEO John Mackey
In August 2009, Whole Foods CEO John Mackey wrote an editorial in the Wall Street Journal expressing his viewpoints on universal healthcare in the United States. "While we clearly need health-care reform, the last thing our country needs is a massive new health-care entitlement that will create hundreds of billions of dollars of new unfunded deficits and move us much closer to a government takeover of our health-care system," he wrote. He continued: "Many promoters of health-care reform believe that people have an intrinsic ethical right to health care—to equal access to doctors, medicines and hospitals. While all of us empathize with those who are sick, how can we say that all people have more of an intrinsic right to health care than they have to food or shelter?"
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. In June 2003, members of PETA gathered in front of Whole Foods headquarters in Austin, Texas, to protest the company’s practice of purchasing duck liver (foie gras) obtained from factories in which workers force-feed large amounts of food to the ducks and remove the end of their bills to keep them from mutilating other ducks.
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.
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. 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.
Despite Whole Foods' welfare standards, it has come under harsh criticism from abolitionist vegans such as Gary L. Francione who view his company's policies as a betrayal of the animal rights position.
Whole Foods Market commits to 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. In 2006, the company announced that it would be providing up to $10 million in low-interest loans to local producers. The Local Producer Loan Program provided its first loan in February 2007.
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.
In February 2006, Shareholders of Whole Foods filed a resolution asking Whole Foods to report toxic chemicals found in its products. 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.
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."
Criticism and controversy
Whole Foods has frequently been the subject of resistance or boycotts in response to proposed store locations.
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 and/or local independent ones.
The company has created controversies at various times, involving business practices, labor issues, product selection, and failure to support farmers and suppliers. In January 2011, they were criticized by the OCA for "surrendering" to global food giant Monsanto by selling GMO foods, however in March 2013, Whole Foods has made a promise that North American stores' products that contain genetically modified ingredients will be labeled as such by 2018.
Awards and recognition
- Whole Foods Market has been included in Fortune magazine's annual list of the "100 Best Companies to Work For" every year since the list's inception in 1998, most recently at No. 5 in 2007.
- CEO John Mackey was named to Barron's list of the world's best CEOs, which recognizes 30 top corporate leaders who excel in not only profit growth and stock-price gains but also leadership strength and industry stature.
- The Environmental Protection Agency awarded Whole Foods Market its top honor of Green Power Partner of the Year for 2006. The company was also presented with the Green Power Leadership Award in 2004 and 2005.
- Based on 2005 revenue, Whole Foods Market is the fifty-fifth largest retailer in the United States.
- In the 2006 Harris Interactive/The Wall Street Journal ranking of the world's best and worst corporate reputations, Whole Foods placed 12th overall and received the best score of any company for social responsibility.
- Whole Foods was included in Corporate Responsibility Officer magazine's annual "100 Best Corporate Citizens" list for 2007, ranking No. 54 out of 1,100 U.S. public companies surveyed. The ranking is based on measures of corporate service to eight groups: shareholders, community, governance, diversity, employees, environment, human rights and product.
- Supermarket News ranked Whole Foods No. 23 in the 2007 "Top 75 North American Food Retailers" based on 2006 fiscal year sales of $5.6 billion.
- CEO John Mackey was named the 2003 Overall National Ernst & Young Entrepreneur Of The Year.
- Whole Foods was named 'World's Greatest Food Retailer' by the British trade magazine The Grocer in 2006.
Among its core values, the company lists "supporting team member happiness and excellence". 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). Workers also have access to a company-funded personal wellness account, and the starting pay at most stores is highly competitive.
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. 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. 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. Conversely, an alternative group on Facebook was set up in support of John Mackey and Whole Foods.
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. 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.
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. 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.
Employee structure and culture
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Whole Foods Market has 12 geographic divisions, each with their own president and network (Whole Foods Market). Within the Whole Foods Company, there is a 4-tier hierarchy of employment: Store Employment, Facilities Employment, Regional Offices, and Global Headquarters (Whole Foods Market). Each of these 4 divisions has their own hierarchy. This hierarchal control implements a system of vertical communication. This system increases visibility and allows supervisors to direct work effectively. Hierarchal control provides the different sub-levels of workers with sufficient authority to oversee store operations efficiently.
Following an internal labor market strategy, Whole Foods Market promotes from within and encourages their employees to apply for available jobs for which they are qualified (Whole Foods Market). All employees attend new member orientation, store tour, department specific training and customer service training. Focusing on employees development and promoting from within results in higher skill retention and decreases the need for supervision.
Employee benefits and incentives
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Operating in accordance with bureaucratic control, every Whole Foods Market store allots a portion of the budget to employee development and evaluation. While a team member is employed at Whole Foods, he or she gains access to the online “Whole Foods Market University”, which is an online information portal that provides information to connect employees to the core values and further product knowledge (Whole Foods Market). When a new team member is hired, they are assigned a mentor, a worker who has experience at the company. On the store floor, the company looks for “team leaders” as opposed to “managers” (Whole Foods Market). Each member has the opportunity to receive further training in various departments, operationalizing career incentives with the bureaucratic control method. The bureaucratic control system institutionalizes the employee hierarchy implemented in stores, regional offices and global headquarters.
Every team member is provided medical, dental, vision and life insurance. Team members are eligible to participate after 400 service hours to Whole Foods Market. As for retirement savings, all those over 18 are eligible to participate in the “Growing Your Future” 401k savings program. All team members 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 (Dobbin). Whole Foods Market has created an internal labor market and corporate culture that motivates its members to work hard, remain with the company, and develop their talents. While there is risk to incentive-based programs and encouraged advancement, managerial autonomy and innovation lead to increased production. By establishing an overall culture and structure, management is able to control subsidiary companies and vendors according to Whole Foods Market values.
Company makeup and relations
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 (Whole Foods Market). 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. However, after sufficient dissent by the court, a compromise was reached and the merger continued. This merger granted Whole Market horizontal integration, as well as more control over competitors and price competition in the health foods market, the external environment.
Subsidiary companies and suppliers
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Whole Foods Market is based on a system of decentralized buying (Whole Foods Market). There is no professional supply chain; everything is unique to each region, employing local businesses. Control is maintained through a multidivisional administration, which creates partnership with local vendors. Each store has freedom to tailor their product offering to the local community. Although there is a high level of store autonomy, each product must adhere to Whole Foods Market high quality standards.
Given the decentralized infrastructure, vendors and product offerings are approached from the regional level due to the diversity of each geographical region (Whole Foods Market). A new vendor must submit an application to the regional office, where product demand and quality is determined (Whole Foods Market). Because there isn’t a singular supply chain, Whole Foods Market receives an overwhelming amount of vendor applications in each region. This multidivisional approach allows Whole Foods Market to control product demand and competition. The transaction costs of outsourcing and creating these partnerships are necessary to achieve the product quality and ideal Whole Foods Market strives for.
- "It's Getting Real in the Whole Foods Parking Lot" (song)
- List of companies based in Austin, Texas
- Sustainable business
- Trader Joe's
- Van Allen, Peter (May 8, 2013). "Whole Foods shares surge on sales report". Philadelphia Business Journal. Retrieved May 8, 2013.
- "2010 Form 10-K, Whole Foods Market, Inc.". United States Securities and Exchange Commission. Retrieved October 27, 2011.
- Smith, Evan (March 2005). "John Mackey". Texas Monthly. Retrieved October 27, 2011.
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