Rotten business at Whole Foods (Guardian UK)

Rotten business at Whole Foods

By posting anonymous attacks against his rivals on the internet, the head of the supermarket chain has hurt himself, his company - and his customers.

Dan Kennedy

When the Whole Foods supermarket chain announced earlier this year that it intended to buy its rival Wild Oats for $670m, you'd have thought it wouldn't be that difficult a trick to pull off.

Yes, it would have eliminated competition between the two leading natural-foods supermarkets. But there's a certain ritual to these things. All Whole Foods executives had to say was "We need to get bigger to compete with Wal-Mart/Safeway/Stop & Shop/whatever," and you could bet the week's grocery money that the Federal Trade Commission, which rules on such mergers, would roll over and play dead. But the FTC has been roused, and Whole Foods founder and chief executive John Mackey has no one but himself to blame.

Last week the Wall Street Journal revealed that, for seven years, Mackey had pseudonymously posted messages on a Yahoo! discussion board (his nom de stupid was "Rahodeb," an anagram of Deborah, his wife's name), heaping praise on Whole Foods and running down Wild Oats. Especially egregious was a 2005 post in which "Rahodeb" speculated that Wild Oats' stock price, then $8 a share, would soon slide below $5 - an indiscretion that has attracted the attention of regulators at the Securities and Exchange Commission.

The startling news about "Rahodeb" came on the heels of an earlier report by the FTC that Mackey had told his board the Wild Oats deal would "avoid nasty price wars" and "eliminate forever the possibility of Kroger, SuperValu or Safeway using their brand equity to launch a competing natural/organic food chain to rival us." Awfully accommodating of Mackey to all but write the FTC's case against him. Mackey's next step was to fire back with a - get this - 14,000-word entry on his blog that, according to reports (hell, no, I haven't read it) accused the FTC of twisting his comments out of context.

It is remarkable that Mackey was able to fritter away so much good will so quickly. Whole Foods is the gold standard - make that the green standard - of the natural-foods market, and latte-swilling elitists like me were looking forward to Mackey's extending his reach. The slogan at the haphazardly provisioned Wild Oats on my way home from work might as well be "You'd Better Want What We Have, Because We Don't Have What You Want". By contrast, Whole Foods stores - none close enough for me to shop at except occasionally - are not just well-stocked and well-managed, but are veritable shrines to the notion of food as an experience. .....(more)

The complete piece is at: http://commentisfree.guardian.co.uk/dan_kennedy/2007/07/rotten_business_at_whole_foods.html

My husband is a meat cutter at another supermarket chain. He's had quite a few customers who told him they now refuse to shop at Whole Foods because of that chains decision NOT TO CATER TO THE CUSTOMER! As you probably know, fresh meats at Whole Foods is EXPENSIVE! If the customer asked the inhouse butcher to please cut something special, or cut a roast in 1/2, or bone a chicken, they were told by Whole Foods that they don't do that! What you see is what you get! The policy of the chain where my hisband works is just the opposite. If you see a nice roast in the case, but it's 3 pounds and you only want 1 pound, the butcher will cut a 1 pound piece off and sell you just the 1 pound! Some of the request are quite interesting, but they do believe in "always please the customer." They've gotten quite a few former Whole Foods customers who are now loyal to THEM!