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Oof. I wonder what this means for Whole Foods culture and employees. If you don't know, John Mackey, the CEO / founder, is a major believer in conscious capita

Oof. I wonder what this means for Whole Foods culture and employees. If you don't know, John Mackey, the CEO / founder, is a major believer in conscious capitalism and of empowering his employees. Whole Food employees get paid pretty darn well with some crazy good benefits for their industry and line-of-work (UNION FREE most of the time too!). WF banks on them being true believers and motivators of the cause - including dedicating a fair amount of paid time to trainings. I've heard mix stories about how Amazon treats employees. I wonder how that will mesh. So I guess I'm asking: * What is going to happen with employee culture? * What is going to happen with all the "Fair Trade" deals WF has in place that might not be the most economical decision now? * Here comes store automation and hefty lay-offs? Source: Worked at WF for 3 years

pc86 9y ago
It's nice to see non-union employees treated well and paid well, not because of any negative feelings toward unions or unionization, but because I think it shows that you can be a successful capitalist without trying to suck every ounce of productivity and profit out of your lowest-paid employees.
- dx034 9y ago
  While I fully agree that it's great to see employees treated well, Whole Foods is not an example that you can be a successful capitalist this way. They worked well for a while but the reason they got bought now is because they struggled over the past years. Probably unrelated to their treatment of employees (US groceries is very competitive at the moment) but AMZN didn't buy a hugely successful company.
  - bjelkeman-again 9y ago
    The day I sell a company for $13Bn I will declare myself successful. Not everything is going to be a a half a trillion dollar company.
    - atonse 9y ago
      I think what they might be talking about is that Whole Foods has had a rocky few quarters and might be forced to sell, where they wouldn't have sold in a different circumstance.
    - dx034 9y ago
      Not if you bought it for $20bn. Wholefoods is publicly owned and the price that Amazon pays is below their price a few years back. It's not about size, $13bn is a lot of money. But Wholefoods needed a strategy or buyer, otherwise they would've faced serious problems in a few years.
      - RobAley 9y ago
        If I had $20bn to buy it in the first place, or be in the position where I could even raise that kind of capital, I would already be successful (in my mind at least).
        hollerith 9y ago
        OK, but WF stock is held mostly by ordinary people (or by pension funds acting on behalf of ordinary people) and the argument being made above is that there are signs that the reason WF ended up being owned by a company without WF's reputation for good treatment of employees is that selling the company was the only way for WF's management to meet their fiduciary responsibility to those ordinary people who hold WF stock.
        TheCoelacanth 9y ago
        Whole Foods doesn't have one owner. It's a publicly traded company.
      - lukas099 9y ago
        How much have they paid in dividends since they cost $20bn?
        e12e 9y ago
  - pc86 9y ago
    It's a $13 billion sale. I struggle to see the scenario under which that is considered a failure. Most start-ups that get $120k from YC are considered a success here. Someone selling their struggling CRUD app to Amazon for $13 million would probably be considered a success here. But the $13 billion sale of a public company is a bunch of hemming and hawing about what the stock was worth a few years ago. I'm not saying it couldn't have been more successful. I'm not saying Amazon won't completely destroy the culture (they may, they may just let it continue as is and use it as Amazon Fresh logistics hubs as some have speculated). But I don't see how this isn't a great example of how you can treat your employees well - better than almost anyone else at the same level - and make a lot of money while doing it.
    - markshead 9y ago
      > I struggle to see the scenario under which that is considered a failure. Wasn't Whole Foods valued at over $20 billion a few years ago? If you bought Whole Foods stock at that point (either as an outside investor or an employee) it might feel like Amazon is buying it for $13 billion because Whole Foods has been having trouble staying competitive in the market. Of course, if you actually started the company $13 billion may be a very big success if your goal was to sell.
- emodendroket 9y ago
  Maybe, but the fact that they were just acquired by a company notorious for abusing its low-level employees shows the limitations of this model (as did the pressure they began to face from investors to tighten up on that front when they started to become less profitable).
  - Joakal 9y ago
    Treating them above market or not, Amazon acquired the company for billions and not because Whole Foods was doing badly.
    - emodendroket 9y ago
      It says right in this article (and in others that have been published recently) that they were under pressure from investors.
      - VT_Drew 9y ago
        Good old investors, so short sighted, they only care about the next 3 months. Whole Foods probably would have been better off as private company, especially with the culture they were trying to create.
        ThrowawayR2 9y ago
        > Good old investors, so short sighted, they only care about the next 3 months. Yeah, darn those investors. How dare people with pensions, 401k's, IRAs, and other investments expect some kind of return on their investment? It's disgraceful. /s EDIT: The sentiment against investors is rather ironic considering the amount of equity collectively held by HN readers.
        kesselvon 9y ago
        short-term boosterism is the cause of more than a few problems in our economic system
- DiNovi 9y ago
  well, he was pressured by his board to sell, so, not the most successful.
- creepydata 9y ago
  >I think it shows that you can be a successful capitalist without trying to suck every ounce of productivity and profit out of your lowest-paid employees. Another example of this is Wegmans - http://www.cbsnews.com/news/could-this-be-the-best-company-in-the-world/ http://www.cbsnews.com/news/could-this-be-the-best-company-i... https://www.washingtonpost.com/news/wonk/wp/2015/05/13/why-wegmans-really-is-the-best-supermarket-in-the-u-s/ https://www.washingtonpost.com/news/wonk/wp/2015/05/13/why-w... http://www.adweek.com/brand-marketing/why-do-so-many-people-go-crazy-wegmans-169396/ http://www.adweek.com/brand-marketing/why-do-so-many-people-... http://m.csmonitor.com/Business/The-Bite/2016/0225/Why-is-Wegmans-so-beloved http://m.csmonitor.com/Business/The-Bite/2016/0225/Why-is-We... “Our employees are our number one asset, period,” Kevin Stickles, the company’s vice president for human resources, told Reuters in 2012. “The first question you ask is: ‘Is this the best thing for the employee?’ That’s a totally different model.”
  - jimbokun 9y ago
    "Alec Baldwin spoke on David Letterman about his mother's refusal to leave upstate New York because there are no Wegmans stores in Los Angeles." Ha, I think that's one of the most ringing endorsements of a business I've ever read.
    - wlesieutre 9y ago
      Having moved from an area with Wegmans to one without, I can sympathize. They're in Massachusetts, New Jersey, and New York, but Connecticut is a sad dead spot in the middle.
  - matt_s 9y ago
    Wegmans is also privately owned so there aren't "activist" shareholders that want hockey-stick growth.
    - quadrangle 9y ago
      Same with Trader Joe's, thankfully
  - 9y ago
- rmc 9y ago
  In the 1880s Bismarck increased the modern welfare state (it was called State Socialism https://en.wikipedia.org/wiki/State_Socialism_(Germany) https://en.wikipedia.org/wiki/State_Socialism_(Germany) ). The idea was that, if the poor people can get some form of social welfare from the existing state, they're less likely to support a proper socialist/communist revolution. Sounds like that. People won't unionise when they don't think they need to.
  - vnchr 9y ago
    Interesting comparison. In this case, people aren't unionizing for essentially the opposite reason. Rather than state provided social welfare, their needs are satisfied through this capitalistic solution. Employees are empowered and rewarded through their work.
    - throwaway91111 9y ago
      I'm not sure if you can call this capitalistic, though. WF as a commune could likely share many of the benefits or exceed them even without requiring shareholders to satisfy. Instead, a devotion to profits will ensure they are given the minimum to execute their job well. It'll be interesting to see what bezos does with it for sure.
      - wooter 9y ago
        name a single commune as successful or operating at the scale of Whole Foods or Amazon. in history.
        Retric 9y ago
        Whole foods is vastly larger than the majority of organizations world wide. Remember the world GDP is only ~80,000 billion so there is a rather small number of Organizations with 10 billion per year in Revenue. But, if your just mean billion plus dollar orgs then something like : https://en.wikipedia.org/wiki/United_Farmers_of_Alberta https://en.wikipedia.org/wiki/United_Farmers_of_Alberta is an interesting comparison. Further, measuring the success of such organizations is hard especially when they are not trying to make a profit. I mean how do you measure something like the US Democratic and Republican parties?
- javiramos 9y ago
  I agree. I just heard this [1] podcast about the Oneida company. It was one of the first companies to show that paying and treating the lowest-paid employees very well and being very profitable are not mutually exclusive. [1] http://www.npr.org/sections/money/2017/06/09/532303452/episode-777-free-love-free-market http://www.npr.org/sections/money/2017/06/09/532303452/episo...
  - fivestar 9y ago
    Of course it's not--you just have to have leaders who don't want 100X what the average employee makes! It's about greed, it's always been about greed. And it's so much worse than that, really. A lot of public companies are being strip-mined of their true wealth by the insiders. Pump the stock, gut the company, screw the investors.
- brian_herman 9y ago
  Maybe sucking every ounce of productivity is by treating your employees well and paying them well?
- jaggi1 9y ago
  > suck every ounce of productivity and profit out of your lowest-paid employees. Isn't it the same company that comited a fraud by selling products that weighed less than what they were charged for ?
- Shivetya 9y ago
  I think many over estimate how much better off people are with unions in grocery level employment and similar. while unions can be beneficial in some areas of employment it is not a miracle worker or guarantee of better outcome.
- icantdrive55 9y ago
  It shows in the attitudes of the employees. Amazon got a bargain. It's too bad WF sold though. My hope is it doesn't turn into Safeway. I literally pick the line with the least angry Checker. The CEO said he would bring down the price of the basics, and he delivered. The price of milk, eggs, sugar, most 360 products are cheaper than Safeway. They do have a lost liter of wine that's pretty good. It's usually hidden though. It's $2.40/bottle. Forget the name. Three something? Plus--I think Bezo is predicting the future. There will be very rich people that will always be buying. I don't have a rosy view of our future. I don't want to live in a society that gets used to steping over the homeless in order to buy groceries, and sundry items. Oh yea, I will never understand that cosmetic/nutrition isle. $30 for shampoo? On a selfish note, I wish I trusted my gut a year ago. I wanted to buy Whole Foods, and Amazon stock. Just figured I can't take a risk.
srameshc 9y ago
This is exactly what came to my mind. I hope Amazon keeps the Whole Foods culture alive and let it run independently.
jasode 9y ago
If Amazon acquisition of Zappos shoes is an indicator, Jeff Bezos let Tony Hsieh (CEO) continue to keep the culture. Hsieh said in past interviews that Bezos if fairly hands off. There was still some business "synergy" in the acquisition because Zappos logistics got integrated into the Amazon warehouse in Kentucky. Whether Bezos treats Whole Foods the same probably depends on whether he has confidence in existing management. It's also possible he has ambitions to totally remake WF into something else. In that case, it doesn't matter what managers are there because Bezos wanted the Whole Foods market presence and not the management team.
- alanfalcon 9y ago
  Zappos CS, front office, creative staff (etc.) got to keep their culture. Zappos warehouse workers got shafted.
  - jhall1468 9y ago
    Blame Hsieh. He is given carte blanche over Zappos as long as he meets his revenue targets. Full stop.
  - SeeDave 9y ago
    Would it be possible to expound on this comment with a decent source (first party is totally okay!)? I ask not as a personal attack on your credibility, this comment just seems a bit inconsistent with the Holacracy movement that he championed a couple of years back.
    - alanfalcon 9y ago
      https://pando.com/2012/06/06/zappos-hands-over-warehousing-to-amazon-focusing-all-attention-on-the-great-downtown-vegas-experiment/ https://pando.com/2012/06/06/zappos-hands-over-warehousing-t... - as you can see, the warehouse isn't included in any of the good stuff, it was just unceremoniously handed over to Amazon to be run as Amazon warehouses are run. I agree that this is inconcsistent with the Holacracy movement (even if the move preceded the movement officially, clearly these workers were never fully Zappos employees in Tony's eyes, which is sad).
bspn 9y ago
I think Zappos is a probably a pretty good proxy. They too had a very different culture to Amazon at the time of acquisition, but I believe it has largely remained intact many years post-acquisition. Amazon as a company has many flaws in its culture (if we are to believe the reports), but they seem to do acquisitions pretty well and know when to leave things alone and let them do their thing.
- oblio 9y ago
  I think something similar happened with IMDB and Twitch.
- loudin 9y ago
  I think this is a different beast. I personally loved shopping at Whole Foods because the food is high quality and their employees are treated well. These tenets are totally incompatible with Amazon's culture. Sure, now they say they will run it independently, but if Amazon were to struggle with Whole Foods, the first thing they do will be to lower labor costs and food costs. Unions to protect workers are now more important than ever in this new age of monopolies.
  - manmal 9y ago
    And what would Whole Foods do if things were turning bad? IMO the exact same thing.
  - ethbro 9y ago
    Or, Amazon + Whole Foods can afford to run less profitably than Whole Foods alone... in WF's core in-store grocery business. Because Amazon can better monetize WF: backing with Amazon's logistics chain, expanding grocery delivery, cross-marketing with customer's existing Amazon purchases, and using WF's real estate for warehousing stock closer to affluent customers for one hour deliveries. I absolutely agree they'll be tempted to squeeze costs, but I think there's a viable financial option to run WF as-is and still accrue benefits to the greater-Amazon.
  - j2bax 9y ago
    Amazon is a tech and logistics company. I doubt very much that their strategy is "buy random company, lower pay of employees, profit". This was a very strategic move for them and I am sure they intend to use their tech and distribution platform to increase the profit, rather than slice and dice the store experience and quality at the local level. This is what differentiated WF from many other grocery stores that I'm sure Amazon could have bid on, why would they want to ruin the one thing it had going for it?
swalsh 9y ago
Considering Amazon has been developing technology for walk in, and walk out checkout, and owns a robotics company, there might be a lot less of them.
- sebmarion 9y ago
  Indeed, I think this is precisely the point.
  - novia 9y ago
    As a loyal Whole Foods shopper I am EXTREMELY excited by this development. The worst part about grocery shopping anywhere is waiting in line. There are a ton of jobs at Whole Foods that have nothing to do with running the cash register, and as long as Amazon keeps those jobs intact I am all for the automation revolution. I have never worked as a cashier, but I can't imagine it's a very fun job. Automating out those jobs seems like a win-win, as long as the former cashiers can find a job doing something else. Edit: For anyone wondering where my perspective is coming from, see this: http://www.businessinsider.com/amazon-go-grocery-store-future-photos-video-2017-6 http://www.businessinsider.com/amazon-go-grocery-store-futur...
    - k-mcgrady 9y ago
      >> I have never worked as a cashier, but I can't imagine it's a very fun job. Automating out those jobs seems like a win-win, as long as the former cashiers can find a job doing something else. Stacking the shelves isn't anymore fun that working the checkout. As someone who has done both I'd say checkout is the preferred role as it's much less physical (stacking shelves gets tiring after 8 hours) and you get chat to customers.
      - andrewprock 9y ago
        Having done both, I prefer stocking. But that comes with a caveat that I've never worked more than a four hour shift. I can imagine that an eight hour shift of stocking would be brutal.
indolering 9y ago
> Here comes store automation and hefty lay-offs? ... or just expand and move people to new stores. Seriously, what's the yearly turnover for front-line positions?
- scotchio 9y ago
  At least in my experience, a lot of employees at the store live and die for the company. Tons of growth / mobility. Lots of 5+ year long employees...
  - indolering 9y ago
    Sure, but I can't imagine every clerk who signs up for the job stays there forever. Even a 15%-25% attrition rate would allow the company to invest in automation without having to resort to layoffs.
- ZanyProgrammer 9y ago
  I worked for Palo Alto Whole Foods from 2008-2011, and I think one thing that really hurt the company was that they aggressively overexpanded. Does Santa Cruz need two stores (Capitola is practically Santa Cruz)? A Blossom Hill store? Competing with Los Gatos and Campbell? At the time (I was s cashier) WF culture was dead set against self checkout stands, because they really wanted someone to be there to help customers.
  - entwife 9y ago
    They have also over expanded in Berkeley/Oakland. Three WF between Lake Merritt and Albany is too many, and they are opening a 4th. They should open more in other parts of the East Bay, such as San Lorenzo, Freemont, other parts of Oakland, etc. Only the 27th street WF is as good as the many, many other natural/whole/organic foods stores there.
    - ZanyProgrammer 9y ago
      They finally opened in Fremont a few years ago. A decent choice (though it cannibalizes some customers from PA)
illumin8 9y ago
Disclaimer: I work for AWS, but my opinions are my own. I don't think you have much to worry about if you're a WF employee. Amazon actually treats their employees very well. In my experience here, I've never seen any of the things the NY times article talked about, either on my team or any other team I've interacted with. People have a healthy work/life balance (40-50 hours a week), get paid very well (definitely above average, and probably in the top 25% of industry), and in general they are concerned with long-term employee sustainability, rather than letting employees burn out and quit. I know that there are some stories about bad experiences in the fulfillment centers, but keep in mind that those positions are temporary seasonal work by unskilled labor. That's a completely different environment than full time employees work in.
- scotchio 9y ago
  I mean to be fair, most of the jobs at WF stores ARE unskilled labor though.
  - illumin8 9y ago
    Not true. I know several people that have good careers at WF and would be offended by the fact that you think they are unskilled. Seasonal workers in the FCs literally get only 4 hours of training and are then filling orders. That's the pure definition of unskilled, and a far cry from a pastry chef at WF.
    - opportune 9y ago
      That's not what unskilled means in this context. It just means that they are easily replaceable and not specialized. You can have respect for people as individuals while recognizing that the job they do could be done by just about anybody (the definition of unskilled)
      - illumin8 9y ago
        A pastry chef is unskilled?
ttam 9y ago
John Mackey http://www.nytimes.com/2007/07/12/business/12foods.html http://www.nytimes.com/2007/07/12/business/12foods.html
bflesch 9y ago
It should be noted that amazon employees also "get paid pretty darn well with some crazy good benefits" and the whole IT at amazon is union free. I feel like this is a great fit, with whole foods being a progressive company in US grocery space.
- alphonsegaston 9y ago
  No one is arguing that the people who work on Whole Food's website are going to suffer a significant drop in the quality of their work experience. It's a fair supposition, however, that Whole Food's front line staff (who map to the warehouse employees that Amazon absolutely treats like garbage) probably will.
  - jhall1468 9y ago
    > It's a fair supposition Why? Reviewing any of Amazon's acquisitions shows that they have revenue targets that, when met, means they just don't get involved. Why suppose they are suddenly going to do the opposite now?
    - alphonsegaston 9y ago
      When you have a documented record of mistreating you're employees, both white and blue collar, the onus is on you to rectify the situation and demonstrate that you'll behave better in the future. Amazon has done neither of these things. It's entirely "fair" to posit that a company with a documented record of abusive workplace practices might extend that same umbrella of mistreatment over an acquisition. Even more so given that the acquisition involves a large number of employees of the category that Amazon has always treated as disposable.
      - jhall1468 9y ago
        > When you have a documented record of mistreating you're employees, both white Yes, the infamous NYT story. It's funny, because I've yet to see all the ugly that story implied was wide-spread across the company. AWS can be notoriously difficult (particularly the not-so-fun S3 on-calls). But there's an enormous difference between a wide-spread problem, and a problem that seems to be focused, very narrowly, on a few teams. > Amazon has done neither of these things. You say that with authority. Do you have ANY familiarity with Amazon's internal policies/changes that have gone into affect regarding these news stories? Here's my problem: A company of some 300,000 people had documented cases of mistreatment. You've, in turn, determined that not only is this problem so wide-spread that we can define Amazon as a "bad employer" but, apparently, they need to take the time to personally inform you of any changes that have been made as a result of said problems. > might extend that same umbrella of mistreatment over an acquisition. And yet, of Amazon's acquisitions every single one of them have been left to their own devices. You seem to have an agenda, which is fine, but let's not pretend your summary is in any way based in fact, but rather, exclusively on a few articles in newspapers.
deleted 9y ago
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bkjelden 9y ago
I would recommend anyone wanting to learn more about John Mackey, and how he built Whole Foods, to listen to a recent episode of the How I Built This podcast featuring him: http://one.npr.org/?sharedMediaId=527979061:528000104 http://one.npr.org/?sharedMediaId=527979061:528000104
mayneack 9y ago
> If you don't know, John Mackey, the CEO / founder, is a major believer in conscious capitalism and of empowering his employees. http://www.huffingtonpost.com/2013/01/16/whole-foods-ceo-obamacare-fascism_n_2488029.html http://www.huffingtonpost.com/2013/01/16/whole-foods-ceo-oba... > “It’s more like fascism,” Mackey recently told NPR. “In fascism, the government doesn’t own the means of production, but they do control it — and that’s what’s happening with our health care programs and these reforms.” > Mackey, a libertarian, compared Obamacare to “socialism” in a Wall Street Journal op-ed he penned in 2009. Obamacare would “move us much closer to a government takeover of our health-care system,” he proclaimed.
- murbard2 9y ago
  So he believes in empowering his employees, and is principled.
- burkaman 9y ago
  Obamacare is obviously closer to socialism, I think that was one of the main goals. His full article adds more context: http://www.wholefoodsmarket.com/blog/john-mackeys-blog/health-care-reform-full-article http://www.wholefoodsmarket.com/blog/john-mackeys-blog/healt... I disagree with almost every word of it, but I don't think it contradicts the idea of "conscious capitalism" or treating your employees well. He also sort of regrets his "fascism" comment: > "Well, I think that was a bad choice of words on my part ... that word has an association with of course dictatorships in the 20th century like Germany and Spain, and Italy. What I know is that we no longer have free enterprise capitalism in health care, it's not a system any longer where people are able to innovate, it's not based on voluntary exchange. The government is directing it. So we need a new word for it. I don't know what they right word is," Mackey says. - http://www.npr.org/sections/thesalt/2013/01/16/169413848/whole-foods-founder-john-mackey-on-fascism-and-conscious-capitalism http://www.npr.org/sections/thesalt/2013/01/16/169413848/who... Although, fascism doesn't just have "an association" with dictatorships, that's literally what it means. Government controlling industry is basically a side effect.
- Applejinx 9y ago
  Sounds like he's demonstrating what being 'consciously capitalist' gets you: bought out, and your lifework cannibalized to please bottom-line hungry investors. Also known as 'you can't have nice things'. So basically, leave out the 'conscious' as it is disposable. Good to know.
michaelbuckbee 9y ago
Probably best to look at Zappos, Woot and other past acquisitions.
- sidegrid 9y ago
  How did that work out for the employees?
Fej 9y ago
The problem with 'conscientious capitalism' is that a competitor will take the idea and run with it, save for the 'conscientious' elements, and push out the original from the market.
- Chaebixi 9y ago
  > The problem with 'conscientious capitalism' is that a competitor will take the idea and run with it, save for the 'conscientious' elements, and push out the original from the market. That's not a problem with 'conscientious capitalism' itself, it's a problem with the monomania of the market and the loss of compensatory factors that could hold that monomania in check.
- lallysingh 9y ago
  I don't know about this. I think it's been over-done to such a degree that actually good customer service is a rare gem to find at this point, and is a better discriminator than price in most products. The price difference is rarely worth the hassle or tension of dealing with bureaucracy or unpleasant people. Or bad websites.. I really can't stand vendors who can't build an easily navigatable, fast website. I've stuck with my cell vendor because of the customer service, even when the price / coverage wasn't as good as I perceived others would be. I've also left my cable company for a poorer competitor because of the difference in customer service. I've got thousands of miles on United that I never intend to use now.
  - Applejinx 9y ago
    The trouble there is under certain circumstances, good will is a commodity. It can be accumulated through a pattern of behavior, and then spent (converted to capital) to turn a short-term profit. So there's a legit strategy that makes sense to a Wall Street firm, where you specifically go after stuff with good will so you can convert that to capital and then flush what's left. It's not dissimilar to how real estate is a form of storing capital, best used without actual people living in the real estate to mess it up: the wipe-and-flush strategy is about intentionally converting these 'rare gems' into raw capital through using the goodwill up. As long as that is more profitable than not doing it, good customer service (or 'enlightened' capitalistic activity) is something you can't have, or can only have until it's seized and squeezed. Market forces make the wipe-and-flush phase inevitable: the longer you hold out, the bigger a prize that goodwill is, provided the thing is publically held and subject to this dynamic.
SmellTheGlove 9y ago
If all of that stuff goes away from WF, it becomes any other supermarket. I think Amazon is smart enough to know that WF is fundamentally different from Amazon.com - the former is purposely niche, while the latter is purposely mass market. I'd think Amazon would have bought another grocery chain if they fundamentally didn't want the WF business model. We'll see, though.
TheCondor 9y ago
I'm a long time WF stock holder and fan of "alternative" grocers. Since it was Wild Oats. There are some big investors that have been unhappy and applying pressure. WF is fundamentally a regional thing that they made multi regional. It doesn't work everywhere with everybody. I'm just guessing, but I'd think WF would tighten up the philosophy a little, probably focus on whole and natural foods more than some of the other philosophies as that can scale. That would mean maybe leading a little less with local, FT, and only organic in favor of whole and natural food. Perhaps some more brand name stuff on the shelves. It provides a great way to roll out Go with a customer base that is probably receptive to it. THen I'd expect more technology stuff, curb side pickup, maybe even free delivery from amazon to WF stores for pickup, maybe. You cant change WF too much or it just breaks and people like it for what it is. I think it would be easier to start a generic grocer from scatch than turn WF in to a safe-way.
- mdesq 9y ago
  Wild Oats was bought by WF, but that purchase was later reversed.[1] I used to be a Wild Oats shopper myself. 1. https://en.wikipedia.org/wiki/Wild_Oats_Markets https://en.wikipedia.org/wiki/Wild_Oats_Markets
  - dsmithatx 9y ago
    Yes Whole Foods started in Austin around 1981 as one small Coop named Whole Foods.
lawik 9y ago
Hopefully it is mostly a strategy for Amazon to cover another type of business amd another type of selling point. Broadening their spectrum. Hopefully.
bradnation 9y ago
guess John Mackey probably worked these into the terms of the deal. The glass half full view is hopefully - the employees have more time and are more focused on interacting with customers and educating them about all their esoteric inventory!
zitterbewegung 9y ago
Amazon usually is mostly hands off to acquisitions like these. Look at Zappos and Twitch. I think that what will occur is probably some kind of service that they will tie into Prime Membership. Maybe also integrate things from their prototype store. Usually Amazon enhances experience in this acquistion and they are free to do what they want. Nothing will happen to their employee culture.
- 1001101 9y ago
  In my view, the customer base is more important than the actual business, and so it may or may not retain its current form over time - my guess is that it will morph into Amazon's vision for retail. I bet 95% of WF shoppers are prime members already - ie. people with disposable income - and patronage and walletshare from that demographic is what Amazon values.
quantazelle 9y ago
When they bought Zappos it seems like they pretty much left the culture alone but helped streamline their backend. Maybe they're planning something similar? I can't see Whole Foods becoming the Wal-Mart of organic produce without completely killing their brand.
sillysaurus3 9y ago
Here comes store automation and hefty lay-offs? If it's any consolation, this was just a matter of time. The next 30 years will be "interesting."
pfarnsworth 9y ago
You don't spend $15B on something known for its strong culture and then gut the culture.
philwelch 9y ago
Amazon bought Zappos forever ago and their unique culture seems to have been preserved. Amazon doesn't necessarily fully assimilate their subsidiaries, especially when that subsidiary has a charismatic CEO who remains in place. If Mackey stays around, Whole Foods is probably still going to be Whole Foods for some time.
nickbauman 9y ago
Having worked for a retail software company that was purchased by Oracle, I can assure you Grocery retail is the most difficult retail supply chain to execute well. The margins are razor-thin. The products have myriads of stubborn problems: short life checking, long life checking, mix of delivery types (direct, warehouse, corporate and 3rd party), very complex planograms, composite units of measure, challenging shrinkage problems, many more supply chain cas fortuit issues. Amazon made its name by shipping consumer hard goods. It continues to do well with non-perishable items. But this nut is the Everest of retail. It will be a challenge to get it to fit into their model.
- devmunchies 9y ago
  > margins are razor-thin at any other grocery store, yes
  - nickbauman 9y ago
    The most you could say is WF's margins are "thin" instead of "razor thin". They're not writing US student loans here.
  - Steve44 9y ago
    I think they have higher costs too. In the UK their sites are in High Street locations unlike most other grocery stores. They also have a lot more front of house staff and have very high quality standards for their products and displays. That all costs and eats away at the raw cost-of-goods margin.
    - naravara 9y ago
      And it's not just an idiosyncrasy to maintain that stuff either. If they don't maintain the perception of being a premium brand/neighborhood anchor people will stop shopping there. Whole Foods gets higher margins because their customer base cares more about various intangibles beyond just the value-for-money. Take those intangibles away and suddenly you're competing on value-for-money alone and Walmart will eat your lunch while smaller, independent grocers go after your dinner.
davemel37 9y ago
I don't know the Amazon executives...but I would give them the benefit of the doubt that they appreciate fundamental differences between a low cost retailer and a high end retailer. Amazon needs to cut costs and find efficiencies every where they can because that is the nature of a business built on low price...I would assume and hope they realize that whole foods is a different type of business that requires happy customers and happy employees to fetch premium prices...I would hope!
guelo 9y ago
My roommate works at WF and gets paid minimum wage, gets crappy benefits, is never allowed to work 40 hours to avoid being labeled "full time", and her schedule is generated by a computer with no human input allowed.
- mee_too 9y ago
  The schedule thing sounds like a fair deal, if you allow human input the people with "people skills" will benefit at the expense of those that are socially awkward.
mickrussom 9y ago
Bezos creates a boiler room. Bezos, to me, is the most Machiavellian man alive and the arms race he started is being emulated by the likes of Jack Ma. This will not lead to happier people. Spying, advertising, fake and low quality products and constant consumption and consumerism is the goal of scamazon. I do like whole foods, a bit expensive, I use co-ops when possible to source food, but Amazon will make sure to gut headcount and compromise on quality anywhere possible to make an extra penny. Bezos farms all this money simply to be the richest and to play with rockets in space while we all suffer from shrinking middle class, lower education standards for most, cancer and an energy crunch. Bezos is dangerously smart, possibly the smartest business man alive or ever, but he is just not a good man. Every one of his successes requires the original to be sacrificed at their hands. using their infrastructure - aws - guarantees that if you are successful there Bezos will steal your model and compete with you. I knew whole foods was falling at the hands of Costco, organic for cheaper, but whole foods had great variety and did try harder than all the other big-chain food stores. Every scamazon victory feels like a loss of the world. Time to bust this trust. Time for regulators to start breaking scamazon up.
pbreit 9y ago
I doubt WF culture is even a fraction as extreme as also-owned-by-AMZN Zappos.
salehk 9y ago
i don't think it'll change much. it's in Amazons best interest to keep whole foods the same. any changes to its culture would make them lose even more customers and whole foods has been on a decline the past few months.
hockeybias 9y ago
...And it wasn't working.
rosser 9y ago
Amazon didn't terribly Amazon-ize the culture at Zappo's, AFAIK; that's at least an existence proof that they don't always do that.
deleted 9y ago
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stretchwithme 9y ago
I don't think there's a significant incentive for Amazon to change Whole Foods. The real gains will be from automating the supply chain, including applying machine learning to quality control. Amazon already grades strawberries that way.
zouhair 9y ago
You added "UNION FREE" like it's a good thing. Funny.
debt 9y ago
why are you excited about union-free stuff
BrainInAJar 9y ago
> Oof. I wonder what this means for Whole Foods culture and employees. > If you don't know, John Mackey, the CEO / founder, is a major believer in conscious capitalism and of empowering his employees. > Whole Food employees get paid pretty darn well with some crazy good benefits for their industry and line-of-work (UNION FREE most of the time too!). You know, if they had unions than an acquisition wouldn't really have a negative effect on their benefits
PaulRobinson 9y ago
I think you can draw a line between this and Zappos. Before being acquired by Amazon, it had a crazy amazing working culture and customer service reputation, and it still does: in fact, that's why Amazon bought it. They wanted to learn from that culture and bring it to Amazon. I doubt WF is going to find themselves watering things down - I think they are going to be spending their time learning something from Amazon about logistics and data-driven growth, but they're going to spend a lot of time teaching Amazon about how running a store that has fans as much as it does customers, about how to make that work. That means they will have to stay true to their cause: Fair Trade and organic deals are part of WF's core brand, and if they remove them, they will lose their fans. What Amazon will want to figure out is how to make that more economic by scaling it. It might be the best thing to happen for animal welfare in the food chain this generation. Store automation is an interesting one. What Amazon have been trying to figure out is how to take away the pain points of stores (queueing), but that does not mean all staff are removed. Stock needs checking, shelves need stacking, and in my local supermarkets the checkout is already semi-automated, but I still have to queue. Amazon's plan is just to take that further. Does it mean you could have fewer staff? Yes, of course, but you could also decide instead of growing profits, grow the brand: redeploy those staff into genuine customer service roles. It's an interesting move, I think. I don't think you need to be alarmed if you're at WF, you need to be alarmed if you're at Walmart, Tesco or any other major food retailer anywhere on the globe though.

pc86 9y ago

It's nice to see non-union employees treated well and paid well, not because of any negative feelings toward unions or unionization, but because I think it shows that you can be a successful capitalist without trying to suck every ounce of productivity and profit out of your lowest-paid employees.

dx034 9y ago
While I fully agree that it's great to see employees treated well, Whole Foods is not an example that you can be a successful capitalist this way. They worked well for a while but the reason they got bought now is because they struggled over the past years. Probably unrelated to their treatment of employees (US groceries is very competitive at the moment) but AMZN didn't buy a hugely successful company.
- bjelkeman-again 9y ago
  The day I sell a company for $13Bn I will declare myself successful. Not everything is going to be a a half a trillion dollar company.
  - atonse 9y ago
    I think what they might be talking about is that Whole Foods has had a rocky few quarters and might be forced to sell, where they wouldn't have sold in a different circumstance.
  - dx034 9y ago
    Not if you bought it for $20bn. Wholefoods is publicly owned and the price that Amazon pays is below their price a few years back. It's not about size, $13bn is a lot of money. But Wholefoods needed a strategy or buyer, otherwise they would've faced serious problems in a few years.
    - RobAley 9y ago
      If I had $20bn to buy it in the first place, or be in the position where I could even raise that kind of capital, I would already be successful (in my mind at least).
      - hollerith 9y ago
        OK, but WF stock is held mostly by ordinary people (or by pension funds acting on behalf of ordinary people) and the argument being made above is that there are signs that the reason WF ended up being owned by a company without WF's reputation for good treatment of employees is that selling the company was the only way for WF's management to meet their fiduciary responsibility to those ordinary people who hold WF stock.
      - TheCoelacanth 9y ago
        Whole Foods doesn't have one owner. It's a publicly traded company.
    - lukas099 9y ago
      How much have they paid in dividends since they cost $20bn?
      - e12e 9y ago
- pc86 9y ago
  It's a $13 billion sale. I struggle to see the scenario under which that is considered a failure. Most start-ups that get $120k from YC are considered a success here. Someone selling their struggling CRUD app to Amazon for $13 million would probably be considered a success here. But the $13 billion sale of a public company is a bunch of hemming and hawing about what the stock was worth a few years ago. I'm not saying it couldn't have been more successful. I'm not saying Amazon won't completely destroy the culture (they may, they may just let it continue as is and use it as Amazon Fresh logistics hubs as some have speculated). But I don't see how this isn't a great example of how you can treat your employees well - better than almost anyone else at the same level - and make a lot of money while doing it.
  - markshead 9y ago
    > I struggle to see the scenario under which that is considered a failure. Wasn't Whole Foods valued at over $20 billion a few years ago? If you bought Whole Foods stock at that point (either as an outside investor or an employee) it might feel like Amazon is buying it for $13 billion because Whole Foods has been having trouble staying competitive in the market. Of course, if you actually started the company $13 billion may be a very big success if your goal was to sell.
emodendroket 9y ago
Maybe, but the fact that they were just acquired by a company notorious for abusing its low-level employees shows the limitations of this model (as did the pressure they began to face from investors to tighten up on that front when they started to become less profitable).
- Joakal 9y ago
  Treating them above market or not, Amazon acquired the company for billions and not because Whole Foods was doing badly.
  - emodendroket 9y ago
    It says right in this article (and in others that have been published recently) that they were under pressure from investors.
    - VT_Drew 9y ago
      Good old investors, so short sighted, they only care about the next 3 months. Whole Foods probably would have been better off as private company, especially with the culture they were trying to create.
      - ThrowawayR2 9y ago
        > Good old investors, so short sighted, they only care about the next 3 months. Yeah, darn those investors. How dare people with pensions, 401k's, IRAs, and other investments expect some kind of return on their investment? It's disgraceful. /s EDIT: The sentiment against investors is rather ironic considering the amount of equity collectively held by HN readers.
        kesselvon 9y ago
        short-term boosterism is the cause of more than a few problems in our economic system
DiNovi 9y ago
well, he was pressured by his board to sell, so, not the most successful.
creepydata 9y ago
>I think it shows that you can be a successful capitalist without trying to suck every ounce of productivity and profit out of your lowest-paid employees. Another example of this is Wegmans - http://www.cbsnews.com/news/could-this-be-the-best-company-in-the-world/ http://www.cbsnews.com/news/could-this-be-the-best-company-i... https://www.washingtonpost.com/news/wonk/wp/2015/05/13/why-wegmans-really-is-the-best-supermarket-in-the-u-s/ https://www.washingtonpost.com/news/wonk/wp/2015/05/13/why-w... http://www.adweek.com/brand-marketing/why-do-so-many-people-go-crazy-wegmans-169396/ http://www.adweek.com/brand-marketing/why-do-so-many-people-... http://m.csmonitor.com/Business/The-Bite/2016/0225/Why-is-Wegmans-so-beloved http://m.csmonitor.com/Business/The-Bite/2016/0225/Why-is-We... “Our employees are our number one asset, period,” Kevin Stickles, the company’s vice president for human resources, told Reuters in 2012. “The first question you ask is: ‘Is this the best thing for the employee?’ That’s a totally different model.”
- jimbokun 9y ago
  "Alec Baldwin spoke on David Letterman about his mother's refusal to leave upstate New York because there are no Wegmans stores in Los Angeles." Ha, I think that's one of the most ringing endorsements of a business I've ever read.
  - wlesieutre 9y ago
    Having moved from an area with Wegmans to one without, I can sympathize. They're in Massachusetts, New Jersey, and New York, but Connecticut is a sad dead spot in the middle.
- matt_s 9y ago
  Wegmans is also privately owned so there aren't "activist" shareholders that want hockey-stick growth.
  - quadrangle 9y ago
    Same with Trader Joe's, thankfully
- 9y ago
rmc 9y ago
In the 1880s Bismarck increased the modern welfare state (it was called State Socialism https://en.wikipedia.org/wiki/State_Socialism_(Germany) https://en.wikipedia.org/wiki/State_Socialism_(Germany) ). The idea was that, if the poor people can get some form of social welfare from the existing state, they're less likely to support a proper socialist/communist revolution. Sounds like that. People won't unionise when they don't think they need to.
- vnchr 9y ago
  Interesting comparison. In this case, people aren't unionizing for essentially the opposite reason. Rather than state provided social welfare, their needs are satisfied through this capitalistic solution. Employees are empowered and rewarded through their work.
  - throwaway91111 9y ago
    I'm not sure if you can call this capitalistic, though. WF as a commune could likely share many of the benefits or exceed them even without requiring shareholders to satisfy. Instead, a devotion to profits will ensure they are given the minimum to execute their job well. It'll be interesting to see what bezos does with it for sure.
    - wooter 9y ago
      name a single commune as successful or operating at the scale of Whole Foods or Amazon. in history.
      - Retric 9y ago
        Whole foods is vastly larger than the majority of organizations world wide. Remember the world GDP is only ~80,000 billion so there is a rather small number of Organizations with 10 billion per year in Revenue. But, if your just mean billion plus dollar orgs then something like : https://en.wikipedia.org/wiki/United_Farmers_of_Alberta https://en.wikipedia.org/wiki/United_Farmers_of_Alberta is an interesting comparison. Further, measuring the success of such organizations is hard especially when they are not trying to make a profit. I mean how do you measure something like the US Democratic and Republican parties?
javiramos 9y ago
I agree. I just heard this [1] podcast about the Oneida company. It was one of the first companies to show that paying and treating the lowest-paid employees very well and being very profitable are not mutually exclusive. [1] http://www.npr.org/sections/money/2017/06/09/532303452/episode-777-free-love-free-market http://www.npr.org/sections/money/2017/06/09/532303452/episo...
- fivestar 9y ago
  Of course it's not--you just have to have leaders who don't want 100X what the average employee makes! It's about greed, it's always been about greed. And it's so much worse than that, really. A lot of public companies are being strip-mined of their true wealth by the insiders. Pump the stock, gut the company, screw the investors.
brian_herman 9y ago
Maybe sucking every ounce of productivity is by treating your employees well and paying them well?
jaggi1 9y ago
> suck every ounce of productivity and profit out of your lowest-paid employees. Isn't it the same company that comited a fraud by selling products that weighed less than what they were charged for ?
Shivetya 9y ago
I think many over estimate how much better off people are with unions in grocery level employment and similar. while unions can be beneficial in some areas of employment it is not a miracle worker or guarantee of better outcome.
icantdrive55 9y ago
It shows in the attitudes of the employees. Amazon got a bargain. It's too bad WF sold though. My hope is it doesn't turn into Safeway. I literally pick the line with the least angry Checker. The CEO said he would bring down the price of the basics, and he delivered. The price of milk, eggs, sugar, most 360 products are cheaper than Safeway. They do have a lost liter of wine that's pretty good. It's usually hidden though. It's $2.40/bottle. Forget the name. Three something? Plus--I think Bezo is predicting the future. There will be very rich people that will always be buying. I don't have a rosy view of our future. I don't want to live in a society that gets used to steping over the homeless in order to buy groceries, and sundry items. Oh yea, I will never understand that cosmetic/nutrition isle. $30 for shampoo? On a selfish note, I wish I trusted my gut a year ago. I wanted to buy Whole Foods, and Amazon stock. Just figured I can't take a risk.

srameshc 9y ago

This is exactly what came to my mind. I hope Amazon keeps the Whole Foods culture alive and let it run independently.

jasode 9y ago

If Amazon acquisition of Zappos shoes is an indicator, Jeff Bezos let Tony Hsieh (CEO) continue to keep the culture. Hsieh said in past interviews that Bezos if fairly hands off. There was still some business "synergy" in the acquisition because Zappos logistics got integrated into the Amazon warehouse in Kentucky. Whether Bezos treats Whole Foods the same probably depends on whether he has confidence in existing management. It's also possible he has ambitions to totally remake WF into something else. In that case, it doesn't matter what managers are there because Bezos wanted the Whole Foods market presence and not the management team.

alanfalcon 9y ago
Zappos CS, front office, creative staff (etc.) got to keep their culture. Zappos warehouse workers got shafted.
- jhall1468 9y ago
  Blame Hsieh. He is given carte blanche over Zappos as long as he meets his revenue targets. Full stop.
- SeeDave 9y ago
  Would it be possible to expound on this comment with a decent source (first party is totally okay!)? I ask not as a personal attack on your credibility, this comment just seems a bit inconsistent with the Holacracy movement that he championed a couple of years back.
  - alanfalcon 9y ago
    https://pando.com/2012/06/06/zappos-hands-over-warehousing-to-amazon-focusing-all-attention-on-the-great-downtown-vegas-experiment/ https://pando.com/2012/06/06/zappos-hands-over-warehousing-t... - as you can see, the warehouse isn't included in any of the good stuff, it was just unceremoniously handed over to Amazon to be run as Amazon warehouses are run. I agree that this is inconcsistent with the Holacracy movement (even if the move preceded the movement officially, clearly these workers were never fully Zappos employees in Tony's eyes, which is sad).

bspn 9y ago

I think Zappos is a probably a pretty good proxy. They too had a very different culture to Amazon at the time of acquisition, but I believe it has largely remained intact many years post-acquisition. Amazon as a company has many flaws in its culture (if we are to believe the reports), but they seem to do acquisitions pretty well and know when to leave things alone and let them do their thing.

oblio 9y ago
I think something similar happened with IMDB and Twitch.
loudin 9y ago
I think this is a different beast. I personally loved shopping at Whole Foods because the food is high quality and their employees are treated well. These tenets are totally incompatible with Amazon's culture. Sure, now they say they will run it independently, but if Amazon were to struggle with Whole Foods, the first thing they do will be to lower labor costs and food costs. Unions to protect workers are now more important than ever in this new age of monopolies.
- manmal 9y ago
  And what would Whole Foods do if things were turning bad? IMO the exact same thing.
- ethbro 9y ago
  Or, Amazon + Whole Foods can afford to run less profitably than Whole Foods alone... in WF's core in-store grocery business. Because Amazon can better monetize WF: backing with Amazon's logistics chain, expanding grocery delivery, cross-marketing with customer's existing Amazon purchases, and using WF's real estate for warehousing stock closer to affluent customers for one hour deliveries. I absolutely agree they'll be tempted to squeeze costs, but I think there's a viable financial option to run WF as-is and still accrue benefits to the greater-Amazon.
- j2bax 9y ago
  Amazon is a tech and logistics company. I doubt very much that their strategy is "buy random company, lower pay of employees, profit". This was a very strategic move for them and I am sure they intend to use their tech and distribution platform to increase the profit, rather than slice and dice the store experience and quality at the local level. This is what differentiated WF from many other grocery stores that I'm sure Amazon could have bid on, why would they want to ruin the one thing it had going for it?

swalsh 9y ago

Considering Amazon has been developing technology for walk in, and walk out checkout, and owns a robotics company, there might be a lot less of them.

sebmarion 9y ago
Indeed, I think this is precisely the point.
- novia 9y ago
  As a loyal Whole Foods shopper I am EXTREMELY excited by this development. The worst part about grocery shopping anywhere is waiting in line. There are a ton of jobs at Whole Foods that have nothing to do with running the cash register, and as long as Amazon keeps those jobs intact I am all for the automation revolution. I have never worked as a cashier, but I can't imagine it's a very fun job. Automating out those jobs seems like a win-win, as long as the former cashiers can find a job doing something else. Edit: For anyone wondering where my perspective is coming from, see this: http://www.businessinsider.com/amazon-go-grocery-store-future-photos-video-2017-6 http://www.businessinsider.com/amazon-go-grocery-store-futur...
  - k-mcgrady 9y ago
    >> I have never worked as a cashier, but I can't imagine it's a very fun job. Automating out those jobs seems like a win-win, as long as the former cashiers can find a job doing something else. Stacking the shelves isn't anymore fun that working the checkout. As someone who has done both I'd say checkout is the preferred role as it's much less physical (stacking shelves gets tiring after 8 hours) and you get chat to customers.
    - andrewprock 9y ago
      Having done both, I prefer stocking. But that comes with a caveat that I've never worked more than a four hour shift. I can imagine that an eight hour shift of stocking would be brutal.

indolering 9y ago

> Here comes store automation and hefty lay-offs? ... or just expand and move people to new stores. Seriously, what's the yearly turnover for front-line positions?

scotchio 9y ago
At least in my experience, a lot of employees at the store live and die for the company. Tons of growth / mobility. Lots of 5+ year long employees...
- indolering 9y ago
  Sure, but I can't imagine every clerk who signs up for the job stays there forever. Even a 15%-25% attrition rate would allow the company to invest in automation without having to resort to layoffs.
ZanyProgrammer 9y ago
I worked for Palo Alto Whole Foods from 2008-2011, and I think one thing that really hurt the company was that they aggressively overexpanded. Does Santa Cruz need two stores (Capitola is practically Santa Cruz)? A Blossom Hill store? Competing with Los Gatos and Campbell? At the time (I was s cashier) WF culture was dead set against self checkout stands, because they really wanted someone to be there to help customers.
- entwife 9y ago
  They have also over expanded in Berkeley/Oakland. Three WF between Lake Merritt and Albany is too many, and they are opening a 4th. They should open more in other parts of the East Bay, such as San Lorenzo, Freemont, other parts of Oakland, etc. Only the 27th street WF is as good as the many, many other natural/whole/organic foods stores there.
  - ZanyProgrammer 9y ago
    They finally opened in Fremont a few years ago. A decent choice (though it cannibalizes some customers from PA)

illumin8 9y ago

Disclaimer: I work for AWS, but my opinions are my own. I don't think you have much to worry about if you're a WF employee. Amazon actually treats their employees very well. In my experience here, I've never seen any of the things the NY times article talked about, either on my team or any other team I've interacted with. People have a healthy work/life balance (40-50 hours a week), get paid very well (definitely above average, and probably in the top 25% of industry), and in general they are concerned with long-term employee sustainability, rather than letting employees burn out and quit. I know that there are some stories about bad experiences in the fulfillment centers, but keep in mind that those positions are temporary seasonal work by unskilled labor. That's a completely different environment than full time employees work in.

scotchio 9y ago
I mean to be fair, most of the jobs at WF stores ARE unskilled labor though.
- illumin8 9y ago
  Not true. I know several people that have good careers at WF and would be offended by the fact that you think they are unskilled. Seasonal workers in the FCs literally get only 4 hours of training and are then filling orders. That's the pure definition of unskilled, and a far cry from a pastry chef at WF.
  - opportune 9y ago
    That's not what unskilled means in this context. It just means that they are easily replaceable and not specialized. You can have respect for people as individuals while recognizing that the job they do could be done by just about anybody (the definition of unskilled)
    - illumin8 9y ago
      A pastry chef is unskilled?

ttam 9y ago

John Mackey http://www.nytimes.com/2007/07/12/business/12foods.html http://www.nytimes.com/2007/07/12/business/12foods.html

bflesch 9y ago

It should be noted that amazon employees also "get paid pretty darn well with some crazy good benefits" and the whole IT at amazon is union free. I feel like this is a great fit, with whole foods being a progressive company in US grocery space.

alphonsegaston 9y ago
No one is arguing that the people who work on Whole Food's website are going to suffer a significant drop in the quality of their work experience. It's a fair supposition, however, that Whole Food's front line staff (who map to the warehouse employees that Amazon absolutely treats like garbage) probably will.
- jhall1468 9y ago
  > It's a fair supposition Why? Reviewing any of Amazon's acquisitions shows that they have revenue targets that, when met, means they just don't get involved. Why suppose they are suddenly going to do the opposite now?
  - alphonsegaston 9y ago
    When you have a documented record of mistreating you're employees, both white and blue collar, the onus is on you to rectify the situation and demonstrate that you'll behave better in the future. Amazon has done neither of these things. It's entirely "fair" to posit that a company with a documented record of abusive workplace practices might extend that same umbrella of mistreatment over an acquisition. Even more so given that the acquisition involves a large number of employees of the category that Amazon has always treated as disposable.
    - jhall1468 9y ago
      > When you have a documented record of mistreating you're employees, both white Yes, the infamous NYT story. It's funny, because I've yet to see all the ugly that story implied was wide-spread across the company. AWS can be notoriously difficult (particularly the not-so-fun S3 on-calls). But there's an enormous difference between a wide-spread problem, and a problem that seems to be focused, very narrowly, on a few teams. > Amazon has done neither of these things. You say that with authority. Do you have ANY familiarity with Amazon's internal policies/changes that have gone into affect regarding these news stories? Here's my problem: A company of some 300,000 people had documented cases of mistreatment. You've, in turn, determined that not only is this problem so wide-spread that we can define Amazon as a "bad employer" but, apparently, they need to take the time to personally inform you of any changes that have been made as a result of said problems. > might extend that same umbrella of mistreatment over an acquisition. And yet, of Amazon's acquisitions every single one of them have been left to their own devices. You seem to have an agenda, which is fine, but let's not pretend your summary is in any way based in fact, but rather, exclusively on a few articles in newspapers.

deleted 9y ago

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bkjelden 9y ago

I would recommend anyone wanting to learn more about John Mackey, and how he built Whole Foods, to listen to a recent episode of the How I Built This podcast featuring him: http://one.npr.org/?sharedMediaId=527979061:528000104 http://one.npr.org/?sharedMediaId=527979061:528000104

mayneack 9y ago

> If you don't know, John Mackey, the CEO / founder, is a major believer in conscious capitalism and of empowering his employees. http://www.huffingtonpost.com/2013/01/16/whole-foods-ceo-obamacare-fascism_n_2488029.html http://www.huffingtonpost.com/2013/01/16/whole-foods-ceo-oba... > “It’s more like fascism,” Mackey recently told NPR. “In fascism, the government doesn’t own the means of production, but they do control it — and that’s what’s happening with our health care programs and these reforms.” > Mackey, a libertarian, compared Obamacare to “socialism” in a Wall Street Journal op-ed he penned in 2009. Obamacare would “move us much closer to a government takeover of our health-care system,” he proclaimed.

murbard2 9y ago
So he believes in empowering his employees, and is principled.
burkaman 9y ago
Obamacare is obviously closer to socialism, I think that was one of the main goals. His full article adds more context: http://www.wholefoodsmarket.com/blog/john-mackeys-blog/health-care-reform-full-article http://www.wholefoodsmarket.com/blog/john-mackeys-blog/healt... I disagree with almost every word of it, but I don't think it contradicts the idea of "conscious capitalism" or treating your employees well. He also sort of regrets his "fascism" comment: > "Well, I think that was a bad choice of words on my part ... that word has an association with of course dictatorships in the 20th century like Germany and Spain, and Italy. What I know is that we no longer have free enterprise capitalism in health care, it's not a system any longer where people are able to innovate, it's not based on voluntary exchange. The government is directing it. So we need a new word for it. I don't know what they right word is," Mackey says. - http://www.npr.org/sections/thesalt/2013/01/16/169413848/whole-foods-founder-john-mackey-on-fascism-and-conscious-capitalism http://www.npr.org/sections/thesalt/2013/01/16/169413848/who... Although, fascism doesn't just have "an association" with dictatorships, that's literally what it means. Government controlling industry is basically a side effect.
Applejinx 9y ago
Sounds like he's demonstrating what being 'consciously capitalist' gets you: bought out, and your lifework cannibalized to please bottom-line hungry investors. Also known as 'you can't have nice things'. So basically, leave out the 'conscious' as it is disposable. Good to know.

michaelbuckbee 9y ago

Probably best to look at Zappos, Woot and other past acquisitions.

sidegrid 9y ago
How did that work out for the employees?

Fej 9y ago

The problem with 'conscientious capitalism' is that a competitor will take the idea and run with it, save for the 'conscientious' elements, and push out the original from the market.

Chaebixi 9y ago
> The problem with 'conscientious capitalism' is that a competitor will take the idea and run with it, save for the 'conscientious' elements, and push out the original from the market. That's not a problem with 'conscientious capitalism' itself, it's a problem with the monomania of the market and the loss of compensatory factors that could hold that monomania in check.
lallysingh 9y ago
I don't know about this. I think it's been over-done to such a degree that actually good customer service is a rare gem to find at this point, and is a better discriminator than price in most products. The price difference is rarely worth the hassle or tension of dealing with bureaucracy or unpleasant people. Or bad websites.. I really can't stand vendors who can't build an easily navigatable, fast website. I've stuck with my cell vendor because of the customer service, even when the price / coverage wasn't as good as I perceived others would be. I've also left my cable company for a poorer competitor because of the difference in customer service. I've got thousands of miles on United that I never intend to use now.
- Applejinx 9y ago
  The trouble there is under certain circumstances, good will is a commodity. It can be accumulated through a pattern of behavior, and then spent (converted to capital) to turn a short-term profit. So there's a legit strategy that makes sense to a Wall Street firm, where you specifically go after stuff with good will so you can convert that to capital and then flush what's left. It's not dissimilar to how real estate is a form of storing capital, best used without actual people living in the real estate to mess it up: the wipe-and-flush strategy is about intentionally converting these 'rare gems' into raw capital through using the goodwill up. As long as that is more profitable than not doing it, good customer service (or 'enlightened' capitalistic activity) is something you can't have, or can only have until it's seized and squeezed. Market forces make the wipe-and-flush phase inevitable: the longer you hold out, the bigger a prize that goodwill is, provided the thing is publically held and subject to this dynamic.

SmellTheGlove 9y ago

If all of that stuff goes away from WF, it becomes any other supermarket. I think Amazon is smart enough to know that WF is fundamentally different from Amazon.com - the former is purposely niche, while the latter is purposely mass market. I'd think Amazon would have bought another grocery chain if they fundamentally didn't want the WF business model. We'll see, though.

TheCondor 9y ago

I'm a long time WF stock holder and fan of "alternative" grocers. Since it was Wild Oats. There are some big investors that have been unhappy and applying pressure. WF is fundamentally a regional thing that they made multi regional. It doesn't work everywhere with everybody. I'm just guessing, but I'd think WF would tighten up the philosophy a little, probably focus on whole and natural foods more than some of the other philosophies as that can scale. That would mean maybe leading a little less with local, FT, and only organic in favor of whole and natural food. Perhaps some more brand name stuff on the shelves. It provides a great way to roll out Go with a customer base that is probably receptive to it. THen I'd expect more technology stuff, curb side pickup, maybe even free delivery from amazon to WF stores for pickup, maybe. You cant change WF too much or it just breaks and people like it for what it is. I think it would be easier to start a generic grocer from scatch than turn WF in to a safe-way.

mdesq 9y ago
Wild Oats was bought by WF, but that purchase was later reversed.[1] I used to be a Wild Oats shopper myself. 1. https://en.wikipedia.org/wiki/Wild_Oats_Markets https://en.wikipedia.org/wiki/Wild_Oats_Markets
- dsmithatx 9y ago
  Yes Whole Foods started in Austin around 1981 as one small Coop named Whole Foods.

lawik 9y ago

Hopefully it is mostly a strategy for Amazon to cover another type of business amd another type of selling point. Broadening their spectrum. Hopefully.

bradnation 9y ago

guess John Mackey probably worked these into the terms of the deal. The glass half full view is hopefully - the employees have more time and are more focused on interacting with customers and educating them about all their esoteric inventory!

zitterbewegung 9y ago

Amazon usually is mostly hands off to acquisitions like these. Look at Zappos and Twitch. I think that what will occur is probably some kind of service that they will tie into Prime Membership. Maybe also integrate things from their prototype store. Usually Amazon enhances experience in this acquistion and they are free to do what they want. Nothing will happen to their employee culture.

1001101 9y ago
In my view, the customer base is more important than the actual business, and so it may or may not retain its current form over time - my guess is that it will morph into Amazon's vision for retail. I bet 95% of WF shoppers are prime members already - ie. people with disposable income - and patronage and walletshare from that demographic is what Amazon values.

quantazelle 9y ago

When they bought Zappos it seems like they pretty much left the culture alone but helped streamline their backend. Maybe they're planning something similar? I can't see Whole Foods becoming the Wal-Mart of organic produce without completely killing their brand.

sillysaurus3 9y ago

Here comes store automation and hefty lay-offs? If it's any consolation, this was just a matter of time. The next 30 years will be "interesting."

pfarnsworth 9y ago

You don't spend $15B on something known for its strong culture and then gut the culture.

philwelch 9y ago

Amazon bought Zappos forever ago and their unique culture seems to have been preserved. Amazon doesn't necessarily fully assimilate their subsidiaries, especially when that subsidiary has a charismatic CEO who remains in place. If Mackey stays around, Whole Foods is probably still going to be Whole Foods for some time.

nickbauman 9y ago

Having worked for a retail software company that was purchased by Oracle, I can assure you Grocery retail is the most difficult retail supply chain to execute well. The margins are razor-thin. The products have myriads of stubborn problems: short life checking, long life checking, mix of delivery types (direct, warehouse, corporate and 3rd party), very complex planograms, composite units of measure, challenging shrinkage problems, many more supply chain cas fortuit issues. Amazon made its name by shipping consumer hard goods. It continues to do well with non-perishable items. But this nut is the Everest of retail. It will be a challenge to get it to fit into their model.

devmunchies 9y ago
> margins are razor-thin at any other grocery store, yes
- nickbauman 9y ago
  The most you could say is WF's margins are "thin" instead of "razor thin". They're not writing US student loans here.
- Steve44 9y ago
  I think they have higher costs too. In the UK their sites are in High Street locations unlike most other grocery stores. They also have a lot more front of house staff and have very high quality standards for their products and displays. That all costs and eats away at the raw cost-of-goods margin.
  - naravara 9y ago
    And it's not just an idiosyncrasy to maintain that stuff either. If they don't maintain the perception of being a premium brand/neighborhood anchor people will stop shopping there. Whole Foods gets higher margins because their customer base cares more about various intangibles beyond just the value-for-money. Take those intangibles away and suddenly you're competing on value-for-money alone and Walmart will eat your lunch while smaller, independent grocers go after your dinner.

davemel37 9y ago

I don't know the Amazon executives...but I would give them the benefit of the doubt that they appreciate fundamental differences between a low cost retailer and a high end retailer. Amazon needs to cut costs and find efficiencies every where they can because that is the nature of a business built on low price...I would assume and hope they realize that whole foods is a different type of business that requires happy customers and happy employees to fetch premium prices...I would hope!

guelo 9y ago

My roommate works at WF and gets paid minimum wage, gets crappy benefits, is never allowed to work 40 hours to avoid being labeled "full time", and her schedule is generated by a computer with no human input allowed.

mee_too 9y ago
The schedule thing sounds like a fair deal, if you allow human input the people with "people skills" will benefit at the expense of those that are socially awkward.

mickrussom 9y ago

Bezos creates a boiler room. Bezos, to me, is the most Machiavellian man alive and the arms race he started is being emulated by the likes of Jack Ma. This will not lead to happier people. Spying, advertising, fake and low quality products and constant consumption and consumerism is the goal of scamazon. I do like whole foods, a bit expensive, I use co-ops when possible to source food, but Amazon will make sure to gut headcount and compromise on quality anywhere possible to make an extra penny. Bezos farms all this money simply to be the richest and to play with rockets in space while we all suffer from shrinking middle class, lower education standards for most, cancer and an energy crunch. Bezos is dangerously smart, possibly the smartest business man alive or ever, but he is just not a good man. Every one of his successes requires the original to be sacrificed at their hands. using their infrastructure - aws - guarantees that if you are successful there Bezos will steal your model and compete with you. I knew whole foods was falling at the hands of Costco, organic for cheaper, but whole foods had great variety and did try harder than all the other big-chain food stores. Every scamazon victory feels like a loss of the world. Time to bust this trust. Time for regulators to start breaking scamazon up.

pbreit 9y ago

I doubt WF culture is even a fraction as extreme as also-owned-by-AMZN Zappos.

salehk 9y ago

i don't think it'll change much. it's in Amazons best interest to keep whole foods the same. any changes to its culture would make them lose even more customers and whole foods has been on a decline the past few months.

hockeybias 9y ago

...And it wasn't working.

rosser 9y ago

Amazon didn't terribly Amazon-ize the culture at Zappo's, AFAIK; that's at least an existence proof that they don't always do that.

deleted 9y ago

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stretchwithme 9y ago

I don't think there's a significant incentive for Amazon to change Whole Foods. The real gains will be from automating the supply chain, including applying machine learning to quality control. Amazon already grades strawberries that way.

zouhair 9y ago

You added "UNION FREE" like it's a good thing. Funny.

debt 9y ago

why are you excited about union-free stuff

BrainInAJar 9y ago

> Oof. I wonder what this means for Whole Foods culture and employees. > If you don't know, John Mackey, the CEO / founder, is a major believer in conscious capitalism and of empowering his employees. > Whole Food employees get paid pretty darn well with some crazy good benefits for their industry and line-of-work (UNION FREE most of the time too!). You know, if they had unions than an acquisition wouldn't really have a negative effect on their benefits

PaulRobinson 9y ago

I think you can draw a line between this and Zappos. Before being acquired by Amazon, it had a crazy amazing working culture and customer service reputation, and it still does: in fact, that's why Amazon bought it. They wanted to learn from that culture and bring it to Amazon. I doubt WF is going to find themselves watering things down - I think they are going to be spending their time learning something from Amazon about logistics and data-driven growth, but they're going to spend a lot of time teaching Amazon about how running a store that has fans as much as it does customers, about how to make that work. That means they will have to stay true to their cause: Fair Trade and organic deals are part of WF's core brand, and if they remove them, they will lose their fans. What Amazon will want to figure out is how to make that more economic by scaling it. It might be the best thing to happen for animal welfare in the food chain this generation. Store automation is an interesting one. What Amazon have been trying to figure out is how to take away the pain points of stores (queueing), but that does not mean all staff are removed. Stock needs checking, shelves need stacking, and in my local supermarkets the checkout is already semi-automated, but I still have to queue. Amazon's plan is just to take that further. Does it mean you could have fewer staff? Yes, of course, but you could also decide instead of growing profits, grow the brand: redeploy those staff into genuine customer service roles. It's an interesting move, I think. I don't think you need to be alarmed if you're at WF, you need to be alarmed if you're at Walmart, Tesco or any other major food retailer anywhere on the globe though.