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Customers call for Whole Foods boycott

It's the shop where wealthy American liberals buy their groceries.

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But the American supermarket chain Whole Foods Market has found itself at the centre of a storm of controversy after its chief executive, John Mackey, wrote an op-ed piece in the Wall Street Journal presenting a free market alternative to President Obama's proposed healthcare reforms.
Mr Mackey began his article with a quote from Margaret Thatcher and went on to add that Americans do not have an intrinsic right to healthcare - an idea strongly at odds with the views of a large proportion of Whole Foods' customer base.

The company, which has 270 stores in North America and the UK, sells organic vegetables, biodegradable washing powder and sustainable seafood to a well-heeled clientele and champions its liberal credentials.

Customer protests
Former Whole Foods devotees responded to Mr Mackey's article by picketing outside branches of the store in Washington DC, Maryland, New York and Austin, Texas.

Others stormed Twitter and Facebook to vent their rage and called on shoppers to boycott the store.
Russell Mokhiber led picketers outside Whole Foods' P Street store in Washington DC. He said, "I have been a Whole Foods customer for many years but I, like many former customers, am disgusted by John Mackey's stance on healthcare."

Representatives from the United Food and Commercial Workers (UFCW) labour union also picketed outside the Washington store.

"Mackey's views are totally at odds with those of the company - he has to go," said UFCW spokesperson Mark Federici.
Outside the store, customers Emily Goulding and Ileana Abreu said the controversy had made them think twice about shopping there.

"It is hypocritical and disingenuous and it really cheapens the brand," said Ms Goulding.
"Whole Foods is expensive but people shop here because they identify with the social conscience of the company - now it turns out that ethos was just a marketing exercise," added Ms Abreu.

Response criticised
Seemingly caught off-guard by the unfolding PR crisis, Whole Foods sought to distance itself from its chief executive's comments.

"We've had a lot of emails and phone calls and people coming into our stores to talk about it," said Libba Letton, spokeswoman for Whole Foods. "Our top priority is addressing their concerns."

But public relations experts criticised the store for bungling its response.

"You have two choices: you either take a proactive approach and wade right in and sort it out or you sit back and wait," said Erica Iacono, executive editor of industry magazine PR Week. "The company seems to be taking a wait and see approach and hoping it goes away. It's a mistake."

Massachusetts-based playwright Mark Rosenthal's "Boycott Whole Foods" Facebook page has so far attracted 24,738 fans, including supporters in the UK and Canada.

Rosenthal said, "I read the article and it stunned me, the hubris of this man who has made his millions selling his products to progressives in America based on an image of caring for the community."


Damage limitation

John Mackey, who started with a single store in Texas in 1980 and has built a company worth $3.8bn (£2.3bn) on the Nasdaq stock exchange, has previously described himself as a free market libertarian.

Responding to the healthcare controversy in his Whole Foods blog, Mr Mackey said, "I gave my personal opinions... [the] company has no official position on the issue."

As part of their damage limitation strategy, Whole Foods' in-house public relations division has created a forum on its website for customers to discuss the issue. There are nearly 17,000 posts, compared with 63 posts on the dairy-free forum.

Some posts were scathing in their criticism of Mr Mackey but others defended the right of the controversial boss to express his views. One respondent said, "Bravo John Mackey! Finally we hear the voice of reason. I plan to start shopping in your store in protest at this liberal lunacy."

The controversy has come at a bad time for Whole Foods which is struggling to grow its sales during the recession.

Dubbed "whole paycheque" by customers on account of high prices in-store, Whole Foods' share price is currently $28, more than 60% below its all-time high at the end of 2005.

Strong brand
Mr Mackey is known for his directness. He was recently quoted in a newspaper saying that as well as healthy, organic produce, "we sell a bunch of junk", a remark reminiscent of Gerald Ratner's 1992 comment that an item sold in his British jewellery chain was "total crap".

The brand is strong enough to bounce back, predicted Iain Ellwood, head of consulting at global branding consultancy Interbrand. "They need to focus the public's attention back on the company's core principles as a community-based brand," he said.

Whole Foods' Libba Letton attempted to do just that, calling on customers to remember the grocer's long history in supporting sustainability and organic farming, food and nutritional labelling, and ethical treatment of animals.

"I would urge customers to keep the big picture in mind when they are deciding whether or not to boycott the store," she said.

Opinion was divided outside the P Street branch in Washington. While many customers entered the store undeterred by the controversy, some left empty-handed, vowing to shop elsewhere.

Teacher Carol Kramer had driven from Virginia to take part in the protest. She said, "There are a lot of people out there who really invested in the Whole Foods brand, emotionally and financially. We are feeling really betrayed."

Source: http://news.bbc.co.uk/2/hi/business/8216685.stm
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