Amazon-Whole Foods story is still being written
Sept. 27, 2017
by Dan Malovaney
John Mackey, co-founder and CEO of Whole Foods, was the keynote speaker for SNAC International's 41st annual Executive Leaderhip Forum.
COLORADO SPRINGS, Colo. – Prior to teaming up with Amazon, John Mackey, CEO of Whole Foods, felt the upscale supermarket chain had become shackled over its not-so-flattering reputation in the media for the high prices it charged for its natural and organic foods.
“One reason the merger came about is Whole Foods was in a trap, and I couldn’t quite figure how to get out of that trap,” said Mackey, CEO and co-founder of the Austin, Texas-based company. “The trap was ‘whole paycheck.’”
However, he added, Amazon’s $13.7 billion deal, formalized in August, almost magically set the company free from its previous reputation in one fell swoop.
“Amazon has a different narrative,” Mackey noted. “Now we’ve embraced its narrative and so ‘whole paycheck’ disappeared. We escaped the trap. I feel a little bit like Houdini.”
Amazon's $13.7 billion deal to acquire Whole Foods was formalized in August.
Speaking at SNAC International’s annual Executive Leadership Forum, held Sept. 17-19, Mackey explained that the old joke about “whole paycheck” has been replaced by widespread media speculation.
Many outlets have predicted how the combined forces of the online retail giant and the 471-store grocery chain could reshape the food industry in years to come.
“When we announced the deal, the press release was less than one page, and no one from Amazon and no one from Whole Foods ever talked to the media,” Mackey said. “Everything you read was from journalists, other experts and pundits, and analysts just making stuff up.”
He pointed out the combined companies haven’t stated much — if anything — to fuel speculation.
“We still haven’t said anything except that we lowered prices,” Mackey said. “We started selling Echos and have put a few [Amazon Prime] lockers in. We do have some banners up in our stores that say, ‘We’re growing something good. This is just the beginning.’”
Whole Foods has hung banners up in its stores that say, "We're growing something good. This is just the beginning."
Instead, he used another “joke” to dampen speculation.
“You know the old saying, ‘I could tell you, but then I’d have to kill you.’ I can tell you, but Amazon would have to kill me,” he said. “We’re going to do some cool stuff, and I can’t talk about anything that hasn’t been made public already.”
He said that’s because Amazon and Whole Foods are only in the initial weeks of what he described as a “marriage.” He used a few other analogies as well.
“Imaging you’re a musician that’s coming up with a song or a novelist that’s writing a novel and you only have the first few bars of your melody, but people want you to sing the whole song to them, but how can you? You haven’t created the whole song yet,” he observed. “Or you’re writing a novel, but you’ve only written the first couple of chapters of it, and they want to read the whole novel. You can’t tell the narrative of the story when you’re creating it.”
Mackey did point out that the combined company plans take a “customer centric” approach to the market. He agreed with the decision to lower prices after the acquisition became formulized. In fact, he added, that’s something he had wanted to do for some time.
As for the future, the only speculation he would give? Stay tuned.
“We’re going to do some amazing things,” he told SNAC executives. “We’re still figuring out what we’re going to do.”