Good interview in the Wall Street Journal< with Whole Foods CEO John Mackey, who addresses the challenges facing the company as it tries top regain the levels of sales growth that it was used to.
Excerpts:
On whether organic and natural food is a fad… “Something that's been going on for 30 years is hardly a fad. For people who are really interested and committed to an organic-food lifestyle, it's not a fad for them any more than Christianity is a fad for Christians, or Judaism is for Jewish people. It's a value system, a belief system. It's penetrating into the mainstream. I don't see that disappearing anytime soon.”
On slowing same-store sales… “Same-store sales are lower for a multiplicity of reasons. Greater competition. There's cannibalization. I read about the slowdown with the consumer, they're spending less. Is there saturation? Certainly, some of our markets have more stores than others. We've had three consecutive years of double-digit same-store sales growth and our sales per square foot are $900. It's harder to raise the bar if you keep raising it. You can't compound at the same rate. No retailer ever does.”
On Wal-Mart’s organic initiatives… “So far, we haven't seen much impact from Wal-Mart, where we've gone head to head against one of their Supercenters that has a lot of organic. It hasn't affected us that much. There isn't a team of people in Austin trying to figure out what to do. We have this empowered, decentralized culture, and a high percentage of them are trying to figure out how to make their stores better, how to improve the customer experience.”
On price… “We're being more aggressive on price. If [a competitor carries] the exact same product, then we're going to sell it at a matching or lower price. Those are decisions being made locally. We've got 189 stores. They're all faced with their own unique competitive environments. It's not necessary for me to know everything that's going on everywhere. I could find out, if there's a reason.”
On investor influence… “Investors are participating in the business, so they have the right to express their opinions, and the legal right to fire management if they're unhappy with their performance. It's not an issue of who controls the business. The stockholders should ultimately control the business. The mistake people make is equating the power to hire and fire with the power to set purpose. Purpose is created or discovered by the entrepreneurs who create the business.”
Excerpts:
On whether organic and natural food is a fad… “Something that's been going on for 30 years is hardly a fad. For people who are really interested and committed to an organic-food lifestyle, it's not a fad for them any more than Christianity is a fad for Christians, or Judaism is for Jewish people. It's a value system, a belief system. It's penetrating into the mainstream. I don't see that disappearing anytime soon.”
On slowing same-store sales… “Same-store sales are lower for a multiplicity of reasons. Greater competition. There's cannibalization. I read about the slowdown with the consumer, they're spending less. Is there saturation? Certainly, some of our markets have more stores than others. We've had three consecutive years of double-digit same-store sales growth and our sales per square foot are $900. It's harder to raise the bar if you keep raising it. You can't compound at the same rate. No retailer ever does.”
On Wal-Mart’s organic initiatives… “So far, we haven't seen much impact from Wal-Mart, where we've gone head to head against one of their Supercenters that has a lot of organic. It hasn't affected us that much. There isn't a team of people in Austin trying to figure out what to do. We have this empowered, decentralized culture, and a high percentage of them are trying to figure out how to make their stores better, how to improve the customer experience.”
On price… “We're being more aggressive on price. If [a competitor carries] the exact same product, then we're going to sell it at a matching or lower price. Those are decisions being made locally. We've got 189 stores. They're all faced with their own unique competitive environments. It's not necessary for me to know everything that's going on everywhere. I could find out, if there's a reason.”
On investor influence… “Investors are participating in the business, so they have the right to express their opinions, and the legal right to fire management if they're unhappy with their performance. It's not an issue of who controls the business. The stockholders should ultimately control the business. The mistake people make is equating the power to hire and fire with the power to set purpose. Purpose is created or discovered by the entrepreneurs who create the business.”
- KC's View:
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That’s an interesting notion – that in the long run, purpose is more important than power.
It takes a somewhat evolved sensibility to understand that.
