In the wake of last week’s eye-opening deal where Amazon acquired Whole Foods in an all-cash transaction valued at approximately $13.7 billion, Whole Foods CEO John Mackey is over the moon with anticipation of what the future holds from a customer engagement/customer loyalty perspective.
Mackey was very open about his thoughts on the massive deal during a June 16 Town Hall meeting with various Whole Foods officials and employees.
“At the end of the day, you can talk all you want to,” Mackey explained. “The proof occurs once you begin living together, and the day-to-day interactions, right? So— all I know is that these are great people with big hearts and big ideals that want to make the world a better place and are making the world a better place. They’re the perfect company for us. There’s no better company in the entire world for Whole Foods Market than this company right here. We just hit the lottery, gang. This is going to be so incredibly wonderful.”
Mackey acknowledged that Amazon is at the forefront of technology while Whole Foods is “a little behind there. I think that we can expect that we’ll go to the front of the class, eventually, in the grocery business.”
Mackey called the deal a “historical moment” for Whole Foods.
“And I think back in my 39 years with the company now,” he explained. “This is the second-most-important day in the history of the company. Obviously, the most important day was the day we were born, right? Otherwise, we wouldn’t be having this day here today. But this is, I think about all the important milestones, I mean, certainly— going public, buying Bread and Circus, buying Mrs. Gooch’s, Fresh Fields, Wild Oats— Fortune 500— you know— 100 most companies to work for for 20 consecutive years— most-admired food retailer for three years— you know, lots of great milestones. But without a doubt, this is utterly amazing. We will look back on this day, a few years from now. And we will be— I hope, as excited as— as I am today. And that’s the first emotion I want to communicate to you. I am, like, super, super excited.”
Mackey labeled the negotiations a “whirlwind courtship,” and Whole Foods would maintain its corporate headquarters in Austin, Texas.
“We’re committed to launching an affinity program,” he said. “We’re going to take $300 million out of our cost structure.”
Whole Foods hired Boston Consulting Group to assist in the cost reduction process.
“It’s going to be such a good thing for our customers,” Mackey added. “Although I can’t tell you all the amazing things that are going to happen over time, one thing I absolutely love so much about Amazon is they think long term. They have had the courage that almost no other public company has had the courage to, basically, resist the drumbeat of short-term, quarterly earnings that have had us trapped here for a couple of years, as our same-store sales came down. We will be joining a company that’s visionary. I think we’re going to get a lot of those innovations in our stores. I think you’re going to see Whole Foods Market evolve in leaps and bounds.”
Besides feeling like Whole Foods “hit the lottery,” Mackey added that it’s also “kind of the dream come true. And I will tell you something. About a year and a half ago, I dreamed that we merged with Amazon. I woke up, and I told my wife about it. And she said, ‘That’s crazy.’ And I said, “I know. That’s really weird, isn’t it? Our quality standards are staying the same. We’re not changing our quality standards. They love our quality standards.”
At the end of the day, Mackey said: “We’re all Amazon people. When this deal closes, we’re all Amazon people. We’re not Whole Foods people and Amazon people. We’re all Amazon people. We’re one large tribe, one large family. There’s an integrity to our culture. And I think they are going to respect that integrity. They’re really smart people. They’re not stupid enough to go in and trash the very asset that they are spending billions of dollars to acquire.”