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By John Mackey, May 21, 2008  |  Meet the Blogger  |  More Posts by John Mackey

I can’t tell you how good it feels to be able to write in my blog again. Even though I wanted to respond openly and truthfully when confronted by the various accusations of wrongdoing last year, our attorneys and Board of Directors both thought it best for me to hold off while they conducted their Special Investigation and the SEC handled its inquiry. Those matters now are completed with the board affirming their complete support for me and the SEC recommending that no enforcement action be made against Whole Foods Market or me. Now that I’m free to post again, I am going to attempt to set the record straight about my internet postings in the past under the screen name “rahodeb.” I promise I’ll be moving on to other topics, but indulge me while I finally get to share my point of view on this particular topic. Here it goes…

 

WHY POST ONLINE? When I first discovered the Whole Foods Market online community at Yahoo! sometime back in 1997 or 1998, I was very excited to find a community that discussed Whole Foods Market. It was a very useful forum for me to explore various ideas and theories, and to have them discussed, criticized and debated. Online criticisms and debates helped me to better understand the strengths and weaknesses of the ideas being discussed, including my own. I could participate in the community as just another unknown participant on equal terms with every other participant.

 

My family life when I was growing up included having various discussions and debates at the dinner table about anything and everything people wanted to discuss. My father was a very passionate and skilled debater and he passed on both his passion and his skills to his three children; I use these skills in business everyday. I process information dialectically—I very much need to have ideas put forth, analyzed, and criticized from various perspectives to help me to fully understand the ideas.

 

The main reason I began posting on Yahoo! was because I enjoy and learn from online community interactions. I also like to express my viewpoints and I like to argue and debate.

 

From the very beginning, I also recognized that this online community had a large number of Whole Foods Market bashers and stock “shorters” who regularly made defamatory and often inaccurate statements about the company. Most of my posts at Yahoo! were made in response to these defamatory attacks on Whole Foods Market. I co-founded Whole Foods Market 28 years ago and have been its only CEO during its entire existence. Next to my wife, I love Whole Foods Market more than anything else in the entire world. Creating and growing this company has been my life’s work. Like any good parent, I wanted to defend my “child” when it was being maligned and attacked unfairly, and I often came to its defense, wielding my debating skills as best I could.

 

WHY A SCREEN NAME?

In online communities such as Yahoo!, the use of screen names is the normal custom as it allows posters to totally engage in the various discussions and debates that were taking place there. An online screen name is a great “equalizer” between people. No one knows who most of the other participants are in everyday life, and so everyone relates to everyone else on equal terms. The true identity in the outside world is irrelevant for purposes of participation in these communities. If a person is well known or famous in “real life” almost no one in the special community knows or cares. What matters is the quality of what is said—not who says it. I do not think that the virtue of transparency is particularly applicable or relevant when it comes to online communities whose custom is to participate through screen names. Within this context, I believed being consistent with the custom was more important than promoting the virtue of transparency as long as my information was accurate and my arguments well-reasoned.

 

CLEARING UP THE CONFUSION

Contrary to the way it was portrayed in the media, I did not participate on Yahoo! primarily to denigrate Wild Oats. I think this is one of the areas of greatest confusion for people. Here is how I see it:

  • OUT OF CONTEXT: I really want to encourage interested people to take the time to read my posts at Yahoo! in the full context in which they were written—usually a discussion or a debate and usually in defense of Whole Foods Market from other posters’ criticism. It is also valuable to read the posts preceding mine. More than 95 percent of my posts were made in response to other participants’ posts. I rarely originated posts myself. I made more than 1,400 posts on the Whole Foods Market and Wild Oats online community message boards on Yahoo! over an eight-year period. (Even though that sounds like a lot, it averages out to about 3 posts per week.) In the total context of my participation in these two communities, my comments regarding Wild Oats occurred much, much less frequently than my comments about Whole Foods Market. I usually had many other things on my mind that I wanted to discuss more than Wild Oats. Unfortunately, the media selected just a few comments out of the 1,400+ that I wrote, presented them out of their proper context, and sensationalized them to tell a story with more controversy and conflict. This was very misleading coverage about my rahodeb postings which exaggerated, distorted and, in some cases, simply lied about what I actually said. The comments that were taken out of proper context of the overall discussion do not accurately represent the actual spirit of rahodeb’s postings, in my opinion.
  • MY COMPETITIVE SPIRIT: I am also a very competitive person. I very much doubt that Whole Foods Market would even exist today without my competitive entrepreneurial drive first creating and then pushing the company forward to grow and evolve for more than 28 years now. I don’t wish to apologize for being highly competitive because much of my drive and creativity come from this competitiveness. While I respect and admire a number of our competitors and have learned from them, I certainly don’t love them, and that included Wild Oats when we competed against it. Whole Foods Market directly competed with Wild Oats for about 14 years, and sometimes the competition between us was both intense and personal. I believe that is largely the way business works—it is highly competitive. However, I don’t believe that I ever crossed the line of fair but vigorous debate in these postings. It is also important to understand that I did not single out Wild Oats as the only competitor I discussed. From time to time I also discussed and debated the virtues of food co-ops, specialty grocers and national and regional grocers.
  • RIGHT TO EXPRESS MY OPINION: All of the Whole Foods Market information that I used in my posts was information that previously had been disclosed by the Company and was included in the public domain. I strongly believe in the First Amendment of our Constitution and our right as citizens to express our opinions to each other. I believe I was exercising this right.
  • MISTAKE IN JUDGMENT, NOT ETHICS: My mistake here was one of judgment—not ethics. I didn’t realize posting under a screen name in an online community such as Yahoo! would be so controversial and would cause so many people to be upset. That was a mistake in judgment on my part and one that I deeply regret because it caused so much negative media attention about me and Whole Foods Market.
  • BECOMING A PUBLIC FIGURE: Perhaps part of the problem here is that when I first started participating in these Yahoo! online communities back in 1998, Whole Foods Market was only 15 percent as large as we are today. We had yet to open any stores in New York City and we weren’t taken particularly seriously by most of our competitors or the media. Whole Foods Market’s tremendous growth over the past 10 years hadn’t yet occurred. As the CEO of Whole Foods Market I was seldom interviewed and few people knew or cared who I was. I wasn’t a public figure and had no desire to become one. However, as Whole Foods Market continued to grow and as we opened large and exciting new stores around the United States, both the company and I became better and better known. At some point in the past 10 years I went from being a relatively unknown person to becoming a public figure. I regret not having the wisdom to recognize this fact until very recently.
  • WRONGLY ACCUSED OF MANIPULATING OATS STOCK PRICE: It was infuriating to be accused of trying to manipulate Wild Oats' stock price downward so that Whole Foods Market could buy it more cheaply. This is malicious speculation and an accusation with no basis in fact. My last Yahoo! post occurred in August 2006, and Whole Foods Market did not begin talking to Wild Oats about a buyout until January 2007—a five-month gap. In addition, almost all of my posts that were critical of Wild Oats were made when its stock was far lower than the $18.50 per share Whole Foods Market paid for it. When I posted as rahodeb, was I trying to “hurt Wild Oats financially or otherwise?” Of course not! The question assumes that someone named rahodeb posting on an online message board could actually hurt Wild Oats if he wanted to. How could rahodeb possibly hurt Wild Oats on a digital message board? The answer is obvious: rahodeb couldn’t.
  • PUMPING UP WFMI? NO: Some have asked if my intention was to inflate Whole Foods Market’s stock price. Think about this: how would rahodeb be able to inflate Whole Foods Market’s stock price even if he wanted to? I was just one anonymous poster amongst hundreds at any particular time. Rahodeb had no authority or power to do anything in the real world, including inflating Whole Foods Market’s stock price. If I had posted as John Mackey then I might have been taken more seriously by the rest of the community, but I never posted as John Mackey or as the CEO of Whole Foods Market, and the other participants didn’t know who I was. The fact is that rahodeb was just another enthusiastic Whole Foods Market “cheerleader” at Yahoo! and consequently few people took him very seriously. Heck, rahodeb didn’t take himself very seriously either. It is quite amazing to me that rahodeb was taken so seriously by so many people when the media broke the story, especially people who had not taken the time to read what rahodeb actually posted.

KEY LEARNINGS I’ve learned many things from these events. The primary lesson I've learned is that because of Whole Foods Market's success, I have become a public figure. My personal and work lives are now closely connected—and impact one another. Anything I say or do is now at risk of showing up on the front page of a national daily newspaper and therefore, I need to be much more conscious about the implications of everything that I say or do in all situations.

 

MOVING ON I wish to apologize to all the stakeholders of Whole Foods Market—customers, Team Members, investors, suppliers, and our communities. I am truly sorry that all this has happened and put a negative spotlight on our company. If I could get a “do over” on this one, I certainly would choose not to have ever participated in the Yahoo! online financial communities. Unfortunately, I cannot undo the past. I can only learn the many valuable lessons that are here for me to learn and try to do better in the future. Thanks to all of you who have continued to support me and Whole Foods Market. I'm excited about what the next few years will bring as we fully integrate the Wild Oats stores and Team Members into Whole Foods Market, and expand our stores and our mission into additional communities while continuing to satisfy and delight our current customers.

Category: ftc, merger, wildoats

 

91 Comments

Comments

Chris says ...
Glad to see you're back posting to the blog again! It's unfortunate that the posting to Yahoo got so blown out of proportion.
05/21/2008 4:54:00 PM CDT
Michael says ...
You da man John. Look forward to reading more of your blogs.-
05/22/2008 9:51:32 AM CDT
Jay in Austin says ...
You should stick to other things, like running a grocery store chain. Seriously, if you have to write this much about how you were wrongly accused, chances are they were right about some things.
05/22/2008 5:16:47 PM CDT
ktyap says ...
Glad to have u back!
05/22/2008 7:00:57 PM CDT
Michael Strong says ...
Great post, John. This is important to say so that sane people can understand how the situation came into being: "I could participate in the community as just another unknown participant on equal terms with every other participant." The notion that an anonymous Yahoo poster could influence stock prices of a large public corporation is so unbelievably silly it is hard to believe that anyone could believe such a thing. Therefore whenever I see that accusation repeated it strikes me as pure spite with no cognitive content at all. This is also an important distinction that I'm glad you made here: "My mistake here was one of judgment—not ethics." Because the anonymous postings were, when they were made, completely harmless, it is absurd to consider them an ethical flaw. That said, given your public status it does make sense to call them a mistake in judgment, especially in light of the extraordinary reaction when they were made public. And, yes, I work with John and he has donated funding to FLOW, the non-profit I head.
05/22/2008 9:22:24 PM CDT
Rand says ...
A corporate officer annoymously posting about their own company and their competitors. Seems unethical to me.
05/22/2008 11:15:27 PM CDT
Bruce says ...
Welcome back Mr.Mackey we have all misseed your words of wisdom.I am sorry it took so long for those to straigten out a very minor situation that was blown out of proportion by so many.I am so happy that once again I am allowed to read your pearls of wisdom.The one thing I admire most about your writtings is that to the best of your ability you always tell the truth.It is often said the truth shall set you free,and it held true as your back.We at the Midwest Distribution are very proud of you and very proud to be apart of one if not the best company in the world to work for.Times may be a little tough for us all now,but as you have we will also perservere.
05/23/2008 3:45:35 AM CDT
marko says ...
Great to have you back at the keyboard. A large segment of the media will always thrive on controversy. Always has and always will. I, for one, have always appreciated your candid remarks and unwavering dedication to your company's mission. Cheers.
05/23/2008 7:49:43 AM CDT
Bill says ...
Mr. Mackey, thank you for taking the time to "set the record straight". Most top-tier executives wouldn't even bother. The only sadder news than the FTC & media beating you up, was the fact that, according to the local newspaper, Whole Foods is not coming to my neighborhood any time soon. We are currently looking at a 4+ hr round-trip to the nearest store. While my employer enjoys that policy, my friends & I don't. The fuel alone makes the trip cost prohibative. Please reconsider. Thanks, & all the best to you & the entire Whole Foods Family.
05/23/2008 9:46:23 AM CDT
Michael Beesom says ...
Welcome back to blogging. To me, the important thing is that you go forward and do even greater things--especially using Whole Foods to help others. Also to innovate in food retailing in new ways. I just read a post in a blog about your Back to Blogging post that I found interesting. Thought you might care to read it if you haven't already. It's here: http://naturalspecialtyfoodsmemo.blogspot.com/search/label/CEO%27s%20Blog%20John%20Mackey Good luck!
05/24/2008 10:58:14 PM CDT
maria elena says ...
Thanks for wanting to share your thoughts and your lessons learned so freely, openly and honestly, this approach is so refreshing from a CEO! SHARING IS CARING, and you seem to care deeply about what you do and that's great. Its difficult to be understood by all of the people all of the time, there are always those souls among us who thrive on the more negative aspects of our humaness and we have to allow them to be without loosing sight of our own greater purpose, in the end, when you come from a place of love, when your work comes from your heart ain't nothing going to stand in the way of universal evolution, :). Your beloved whole foods market does have its share of critics, ce la vie! And while I don't agree with everything the market does, I am one that reminds the critics that WFM has single handedly raised the national awareness of the role that food plays in our life, and how we need to focus, as a society, on demanding that our food supply be treated with nothing but the greatest of respect and care, our existance depends on it. From my perspective it was WFM that catapulted us to this awareness and for this I am deeply grateful. Is WFM perfect? no, and you know that, but I have no doubt that it will continue to evolve and lead us, directly or indirectly, to a better relationship with our food. thank you.
05/25/2008 8:41:56 PM CDT
Lila I. says ...
John, This is very helpful to hear your side of the story (not that I placed any weight on the "other" side ;-). It's amazing and just wrong how the media can manipulate things and make them appear so far from the truth! Congratulations for "the board affirming their complete support for you and the SEC recommending that no enforcement action be made against Whole Foods Market or you." Also, congrats for handling this whole thing with patience and dignity. It's great hearing about your parents in your past two posts. I bet they would be very proud of you.
05/25/2008 10:58:35 PM CDT
Joe Johnson says ...
Actually, Vitamin Cottage opened in Colorado in 1955. Whole Foods has not single handedly raised national awareness. They've helped, and it's great, but quit taking all the credit. You don't deserve it all. It's great to have competition! I wouldn't equate dignity to posting propaganda under a false identity, but we all have our own personal opinions of what's right and what's wrong. WF has some serious competition right now. I'm finding a lot of similar products at your competitors for 30-40% less. Maybe WF should reconsider the fancy fixtures and the amount of money spent moving displays around to help decrease cost because your prices are getting high! Something to think about. I still shop at Whole Foods, but I find the prices going up, and the quality going down and it worries me. Get back on track guys!!!
05/26/2008 1:06:39 PM CDT
Rohit Bhargava says ...
John, This is a great post and way to try and set the record straight on what has become a favourite example for many people who work in marketing and social media (including myself) about the dangers of not using full transparency. For my part, I intend to share your update anytime Whole Foods comes up in the events and will blog about it on my marketing blog. I also recently wrote a book about the need to have a personality when building a brand called Personality not Included. There is a companion site to the book called The Personality Project (www.thepersonalityproject.com) that I would like to invite you to submit a contribution to as another way to get your message out there. Let me know if you'd like to participate in the site (all I need is a single blog post), and I'm glad to see you getting back to blogging!
05/28/2008 9:25:36 AM CDT
Chris Parente says ...
Well written post, but you're trying to have it both ways -- appear to apologize, while justifying why you didn't do anything wrong.
05/28/2008 9:09:00 PM CDT
Grace Haener says ...
John, Thank you for being so passionate about food. Most CEO would have released a 1 line statement through their lawyers. You care enough to let us know your thoughts. A CEO who cares is rare. When I move to CT-Fairfield last year one of the exciting thing to look forward was Whole Foods coming to our area. I look forward to your blogs..speeches. I am a big fan of yours John and you were one of the pioneers in this country to raise national awareness about eating well ..eating right. All the best.
05/29/2008 9:06:58 AM CDT
Andres Acosta says ...
For a CEO of a publically traded company to run a blog requires transparency,courage and committment to integrity. John clearly says, "My mistake here was one of judgment—not ethics"; and then goes on to do a good job of admitting the mistake while defending his ethics. It’s the sign of a great leader who can pick himself after taking a hard fall and keep moving forward.
05/29/2008 9:44:14 AM CDT
John Mackey says ...
I want to thank the folks who have posted comments supportive of my return to blogging. Thank you. To Jay: I feel that my blog post was relatively short and did not try to answer but a small fraction of the hundreds and hundreds of accusations and attacks made against me in the media. I would need to write a book to do so. I do not agree with you that mere repetition of falsehoods by many different people makes something true. To Rand: Why do you think such postings are unethical? Why would it be ethical for you to post under a screen name on a Whole Foods on-line community and not me? Why do you have such rights and not me? To maria elena: Thanks for your support. I think Whole Foods has had a major impact on raising awareness about food issues, but we certainly haven't done so "singlehandedly". The movement towards quality food and sustainable agriculture is much, much larger than Whole Foods. However, we are proud of the contribution that we have made and hope to do much more in the coming years. To Lila: Thanks for the nice post. My father was very proud of me before dying in 2004. He and I were very close and he mentored me in business for many years. Unfortunately my mother died back in 1987 before Whole Foods had achieved much success or had even expanded outside of Texas. She never really understood what Whole Foods was all about. It was very confusing to her. I certainly would enjoy a chance to talk to her today and show her some of our newer stores. To Bill: Thanks for your support of my blogging. We are opening stores as fast as we are able to. We've got about 89 in development right now. To Joe Johnson: I have never claimed that Whole Foods "single handedly raised national awareness" and I can't "quit taking all the credit" because I've never done so. You are apparently responding to maria elena's post, not to me or to Whole Foods. I don't kow maria elena and she doesn't speak for Whole Foods. I'm glad you recognize that Whole Foods has got lots of competition. We certainly do! I wish the FTC would talk to you so you could set them straight on this. I never posted any "propaganda"--just my personal opinions. Adjusting for food inflation our prices have been steadily going down for years as our larger scale permits us to buy at lower prices and to pass these savings on to our customers. I'm sorry that we seem to be losing you as a customer Joe. We will try to do better in the future. To Rohit Bhargava: Thanks for your post. I can't promise to participate on your blog site on "Personality", however. It sounds very interesting, but my time is very scarce. To Chris Parente: I'm not trying to have it both ways. I am in fact truly sorry that my rahodeb postings caused so much negative media attention to Whole Foods Market and so many personal attacks on myself. I deeply regret that happening and I've learned many valuable lessons. That being said: I don't believe I did anything either illegal or unethical when I posted on-line. I violated no federal securities laws. I violated no company policies at Whole Foods. I merely posted my opinions on Yahoo! under a screen name which is the exact same thing millions of other people do every day. What is so terrible about that?
05/29/2008 9:54:03 AM CDT
Bragi Valgeirsson says ...
I have to agree with Chris on this. It looks like these deals that corporations sign with the Government where they state they did nothing wrong but at the same time agree never to do it again. Sometimes, its better just too simply say I was wrong, I am sorry and move on, not a long letter approved and reviewed by a team of lawyers.
05/29/2008 10:00:40 AM CDT
Chistopher Andrew says ...
Sorry, but this still leaves a bad taste in my mouth. Mackey openly critcized Wild Oats on the Yahoo! boards. If enough people do something like that, it will start to make some investors skittish, and the stock price could well have suffered as a result. And if Mackey ever gave the impression that he had expert knowledge of the industry (which it would be hard for him NOT to), that would only make people take his comments even more seriously and thus hold the potential to sway OATS' price even more. People will always say bad things about you. It happens, especially when you're in the public spotlight. Hiding your identity on an anonymous message board is not the best -- or most ethical -- way to combat that. Wouldn't it have been enough for Mackey to read what people said and leave his comments here at this blog, if he had something to say? The transparency would have been much better.
05/29/2008 11:32:56 AM CDT
Bryan Bergmann says ...
I'm a new employee at the Nashville store and am thankful that you guys bought Wild Oats and came to town. No other institution is poised to have the greatest influence to bring people inside the "natural living" camp than Whole Foods. Chemicals in our food and in our homes are shortening life spans and life quality. Whole Foods bridges the gap and helps people change. Please keep blogging vigourously to spread your ideas! I'm a fan of daily consistent posts that develop a thesis over time. This blog could be another method of cultural change. It all starts with thoughts and ideas... Thanks for pioneering, I hope to meet you in Nashville some day!
05/29/2008 1:43:08 PM CDT
Jini says ...
Everyone is entitled to their own opinion and that is what freedom of speech is about. I do however think that this long message was quite unecessary. I mean why go off on a tangent about creativity and competitiveness, I mean really, Whole Foods is a upper-middle class organic food store. I'd understand that statement if it were in reference to music or art, but c'mon now, we are talking about everyday food you put on the table to feed your family. I understand it takes perseverance to keep pushing your company further, but in reality, that is not a 1 man job, that is a job of a compilation of people, including the consumers that buys your products. If anything you should be even thankful that there are actually people out there that don't mind paying an arm and a leg for groceries. But that is just my opinion, and I am entitled to one just like anyone else. Anyhow, although I don't agree with everything said. I don't think anyone should be punished for blogging. All in all, it's your choice if you want to read on or close the webpage. I really don't believe that reading a blog or a reply can change up a stock price, unless you take everything read on the internet literally (which you shouldn't anyways).
05/30/2008 11:46:39 AM CDT
Maryel Mckeown says ...
Dear John, It is with great delight that I discovered that you were back to blogging again. I often read your words and find them to be insightful, inspired and always interesting. I am also proud to be a teammember of a company that is socially responsible, and one that places teammember excellence and happiness, along with satisfying and delighting our customers as a basic core value. As for those posters who continue to insist that we are an over priced store, I suggest that they go to the nearest WFM and ask for the concierge or the marketing person to show them around the store pointing out the true value of our private label 365 products. The quality of our personal store brands is stellar and the price point frequently the best price for that particular item. The level of customer service is unequalled, this being the true benefit of shopping WFM. Knowledgable teammembers who are willing and able to answer questions, to offer suggestions, and to go out of their way to ensure that the customer gets an unforgettable shopping experience, this is what makes WFM the leader in natural and organic foods. Thank you for leading the company forward, for your passion & vision, and for creating a company where we as teammembers truly have a hand in our shared fate. Looking forward to your next blog. Peace.
05/31/2008 6:20:11 PM CDT
J.Peron says ...
Your comments in reply to the accusations make perfect sense. The very idea that an anonymous "nobody" could either inflate one stock or deflate the value of another is, on the very face of it, ludicrous. It was the anonymous nature of your posts which made them ineffective for that purpose. To then try and turn them into a campaign of some sort is absurd. Your point is persuasive.
06/01/2008 5:40:40 AM CDT
Lord Westfall says ...
Ha! I had wondered why you had remained silent while all this nonsense was going on...it seems in your nature to confront such absurdities. Anyone who has even a hint of critical thinking skills would realize that posting on a stock message board has no effect on the stock price of a major company...it is truly amazing that anyone can even think this. Of course this whole issue wouldn't have even came up if the FTC hadn't placed absurd demands on WFM and then gone on a fishing expedition trying to find something negative about you. What was that all about? Anywho, I have a question for you. If you were posting on OATS' board claiming the stock was overvalued, why then would you turn around and pay a premium to aquire it a few months later...and a large premium at that? As a shareholder, I'm a bit concerned that OATS wasn't worth $18.50/share, and some of the posts I've read indicate that you felt the same way earlier. Did the value of OATS really change that dramatically in such short time? Regards, Lord Westfall
06/01/2008 5:52:45 AM CDT

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