Whole Foods chief John Mackey has finally lost control of his company, which he calls his “baby.” Friday, he sold it to Amazon for 25 percent less than its 2015 value. Irony is, Mackey could’ve avoided this outcome if he’d stuck to the principles of “conscious capitalism” he espouses.
For two years, investors have pressured Whole Foods. Last week, Mackey slammed a hedge fund for pushing him to sell, telling Texas Monthly that “greedy bastards” were “putting a bunch of propaganda out there.” He has a point: many investors want a short-term buck.
But he brought this on himself. His firm committed a common sin: over-expansion during the good times. In 2010, Whole Foods had 299 stores. By last year, it had 456. Demand, as measured by store traffic, has been falling since 2015.
Whole Foods faces tougher competition, too: online purveyors as well as Walmart and Kroger offering organic food.
But Whole Foods’ biggest flaw — one that even agitated investors have missed — is that it stopped respecting its customers. The company can’t deal with busy stores or empty stores.
Take an example of the latter. The store on South Carolina’s Hilton Head Island is vast, shiny and relatively new. It’s also devoid of customers.
The store has dealt with this by taking away what its customers want....