TED CARTER: Ego ahead of shareholders — the unfolding Whole Foods story
by Ted Carter
Published: January 24,2014
Don’t be surprised if national health care politics comes into play when Whole Foods Market opens its doors at Highland Village in Jackson Feb. 4.
The man who co-founded the retailer of natural and organic foods and is today its co-CEO started it all by equating the Affordable Care Act to fascism and reportedly encouraging people to shun the law’s offerings.
Well, actually he started it in August 2009 with an op-ed in The Wall Street Journal that described the Affordable Care Act as “the last thing” the United States needed.
“Instead, we should be trying to achieve reforms by moving in the opposite direction — toward less government control and more individual empowerment,” Mackey wrote.
In the last year, the co-boss of the $19.5 billion publicly owned company with 349 stores has turned up the volume considerably, going from calling the Obama administration’s prized legislation “socialism” to ending the year with the fascism characterization and accusing the government of seizing the health care sector’s “means of production.”
So, here we are just two weeks before Whole Foods makes its Jackson debut. You want to bet protesters won’t interrupt the wonderfulness of the grand opening of its 34,000 square-foot store?
You’ve also got to ask why someone who has helped found an investor-owned company whose sales zoomed from $91 million in 1991 to $12.9 billion last year keeps putting his ego ahead of shareholders. Shareholders must hope he’ll take an extended stay on a far away island.
Mackey will tell anyone who will listen he is a “conscious capitalist” who believes free markets “are the best way to organize society.”
But “free markets” react when an executive’s statements and actions don’t jibe with his company’s hard-won branding as a socially conscious organization that very much cares about the health of the communities in which it markets are located.
Whole Foods’ shares on the NASDAQ closed Jan. 17 at $52.33 compared to a 52-week high of $65.59.
As the Finance Guide of DailyFinance.com reports, 2013 started out with much promise. A 2-for-1 stock split in late May that took common outstanding shares from about 185 million to 370 million won the hearts and minds of investors. The glow soon dimmed when Whole Foods issued new shareholder guidance that put expected earnings per share at $1.65 to $1.69, down from a previous guidance of $1.69 to $1.72. The expected decline in EPS would be accompanied by a projected revenue growth of 11 percent to 13 percent instead of the earlier estimate of 12 percent to 14 percent.
Though the change in the new guidance was hardly drastic, Whole Foods’ shares declined 11.18 percent in the next trading day. “It now sits more than 18.4 percent below its 52-week high of $65.59,” DailyFinance said on Jan. 15.
Amid this market decline, the California progressive group The Courage Campaign has accused co-CEO Mackey’s crusade against the federal health care law of resorting to “lies” that deter people from signing up for lifesaving health insurance.
“We must fight back against this kind of confusing misinformation, and tell John Mackey to stop misleading Americans. Statements like these confuse people about the law and scare them away from signing up for the coverage they desperately need,” Courage Campaign said in an email blast seeking petition signatures.
The irony here is that while Mackey has busied himself hammering dents in the Whole Foods brand over expanding health care coverage, few outside the company know he gives his workers some of the best benefits in the country, according to media reports.
In mid December, Mackey went on MSNBC’s “Morning Joe” and is reported to have boasted off air that Whole Foods stores are too popular to be harmed by his political views.
Perhaps that would be so in another market climate. Today, the entire healthy foods sector appears headed for sick bay, though Whole Foods less so than the others.
Competitor Fresh Market, which has a store in Ridgeland’s Renaissance at Colony Park among its 149 stores, racked up a sales decline of nearly 16 percent in 2013, according to DailyFinance, while Whole Foods showed a laudable 26.8 increase.
But since Nov. 6 and Mackey’s “fascism” remark, Whole Foods has joined Fresh Market in sales declines. Whole Foods from Nov. 6 to Jan. 10 had a sales drop of 18.47 percent and Fresh Market a drop of 24.46 percent.
Somewhere atop a mountain in the Himalayas, a business guru is sitting in the Lotus position and muttering to himself: “Doesn’t this Mackey fellow know that when the going gets tough the pros shut up.”
» MBJ staff writer Ted Carter can be reached at 601-364-1017 or email@example.com
To sign up for Mississippi Business Daily Updates, click here.
FOLLOW THE MBJ ON TWITTERMy Tweets
Top Posts & Pages
- Mad Genius, Eyevox owner acquires Mississippi Film Studios
- Payday lender, fired executive exchanging blame for lender’s regulatory woes
- McDaniel files legal arguments as he looks to overturn Cochran loss
- UMMC reaching out after death of high school football player
- Tragedy for Jackson Prep: Football player Walker Wilbanks dies
- Fitch gives Mississippi Power a negative outlook due to Kemper plant
- UPDATED: Jackson agrees to repay HUD $1.5 million for Farish Street blunders
- Mississippi River mayors announce 'seed money' for waterfront developments
- Payday lender expects clean bill from regulators