Back to Basics for Whole Foods Market
Feb 22, 2010 6:00 AM, By ROBERT VOSBURGH, Group Editor, SN Whole Health
Retailer turns 30 promising a return to its health and wellness roots
FACED WITH A MILESTONE BIRTHDAY, Whole Foods Market is taking a good hard look in the mirror. Life is good, and it shows. The chain is prosperous, worth $8 billion; it has exposed untold millions to a better life through diet; and it still leads the way among food retailers in promoting organic foods and sustainability.
Yet, the reflected image also reveals signs of age. The retailer has gotten a bit pudgy with products that are anything but healthful; the reputation of its chief executive officer has been wrinkled by controversy; and profits have sagged from their all-time highs.
This is Whole Foods Market at 30.
As the country emerges from the depths of the recession, Whole Foods is also coming out of its own dark period. The economy and some corporate missteps broke the long strides the 285-store arbiter of the organic lifestyle had made into the world of mainstream food retailing. Now, with the days of double-digit comps and steamroller store growth over, and a new landscape populated by consumers who are choosier in what they buy, and how much they are willing to spend, Whole Foods has been forced to pause and reassess its role in the marketplace. Most recently, the focus has been on once again establishing itself as a wellness destination — a move that brings it back the beginning.
Building Up
Any regular shopper of Whole Foods knows the chain's offbeat history. John Mackey opened the first store in September 1980 in Austin, Texas, with his then-girlfriend and 19 other people. A photo from that period shows a lot of men with beards, women in bandanas and everyone smiling. Inexplicably, one man is barechested.
To mark the special anniversary, the retailer has begun posting on its website the recollections of a few employees from that time, and they all remark how vibrant the store was. One recalled the 1981 flood that inundated Austin and nearly forced the young store to close.
“The kindness, trust and equality shown to all made a tremendous impression on me,” wrote Peggy Hayes, who is still with the company. “We faced hard work and those who chose to stay were paid and as you know the store not only survived but thrived. It was great fun working in the original Whole Foods Market.”
The idea that retailing could be fun comes from Mackey himself. In a recent interview with the New Yorker magazine, the 56-year-old CEO remembered the point during his aimless college years in the mid-'70s when he found his niche while working at a local vegetarian co-op.
“I loved retail,” he told the magazine. “I loved being around food. I loved natural foods. I loved organic foods. I loved the whole idea of it.”
With borrowed money, Mackey (who has consistently refused interviews with trade publications, including SN) opened his first version of a store, a riff on the Safeway chain, called SaferWay, in 1978.
Mackey freely admits his lack of formal training in running a retail business. The first Whole Foods, occupying an old nightclub, measured 10,500 square feet and sold the usual bulk foods and organic produce, but also beer and wine and other items that fell outside of the crunchy lifestyle.
Still, something clicked. From the start, all the products Whole Foods stocked were held to certain ethical and environmental standards. In turn, employees (forever called “team members”) labored under a short set of ideals that emphasizes — above all else — quality, service and authenticity.
“One of the hallmarks of Whole Foods is that you can talk to almost anybody in one of the service departments, and they're extremely knowledgeable,” said Jim Hertel, managing partner at consulting firm Willard Bishop. “Those kinds of things move Whole Foods beyond simply being a natural and organic retailer.”
As the chain grew, it adopted the slogan, “Whole Foods, Whole People, Whole Planet.” Over the years, the phrase has constantly been reviewed, weighed against market forces and built upon, so that it's constantly current and relevant to shoppers. At the height of the chain's influence, Mackey told stockholders that Whole Foods was much more than a purveyor of food.
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