retail news in context, analysis with attitude

Good interview with Whole Foods CEO John Mackey in the Austin American-Statesman. Excerpts:

The past year... “It was the worst economic environment that I've experienced in my lifetime, at least since I became an adult. Perhaps that downturn in the early '70s was pretty bad, but I was in college then, so it didn't really register with me.

“We had negative same-store sales for the year. That was the first negative same store sales in our 31-year history. We had been used to having high-single-digit, low-double-digit (same-store sales), really since the company was founded.

In a lot of ways, our business model has been built upon continuous growth. We sort of adapted everything around that strategy, so it was a major shift.

“If you're growing very rapidly, it doesn't matter if you make mistakes, in a way, because the growth kind of bails you out. And so having that hot water faucet turned off, we have to learn to live and take cold showers, you might say. I'm really proud of our company, because we were able to make a fairly rapid adaptation to that environment, and even though we had almost no sales growth for the company, we still managed to increase our EBIDTA (earnings before interest, taxes, depreciation and amortization, a key measure of financial performance). I think we were up 16 percent, 16.3 percent for the year, despite the weak sales growth. And we slowed our growth down: We were going to open 25 to 30 stores, and we opened 15 stores.

“So I'm really proud of how well our company responded because it's not that easy to shift 31 years of continuous growth and all of a sudden have to be watching every penny and managing our expenses and our capital so carefully.”

On competition... “We have more competition today than we've ever had before. And a lot of that competition takes the form of competing on the basis of price. So in some ways, we're responding to the competitive reality that we face.

“For most of our history, we didn't have any competitors that were selling the same foods we were selling. Now we do ... we went from flying under the radar to everything we do seems to be broadcast in a larger-than-life sense.”

The future... “Right now, the thing I'm most excited about is there is so much scientific evidence right now that's linking a Whole Foods, plant-based, nutrient-dense, low-fat diet as a way to prevent most of the diseases that are killing us in America: obesity, heart disease, diabetes, cancer, autoimmune diseases. Things that I sort of knew intuitively when we started the company.

“I felt like if you ate natural and whole foods, that was a smart thing to do, you'd probably live longer. Now the science is really starting to back it up.

“And yet even though the science is there, there are so many vested interests that are committed to the status quo, the way people eat. So what I'm most excited about is the educational efforts we're going to be putting in and the research that Whole Foods is going to be funding, to more widely publicize the science and to prove that you can lose weight, keep it off and the diseases that are killing people, you don't need to get those diseases.”
KC's View:
There are few things in life more persuasive than a true believer.