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Whole Foods was nimble in reacting to the recession, creating a formula for success by cutting costs while expanding its influence.


It's a good time to be Whole Foods.

The natural foods grocer has roared back from the recession, rebounding in sales and profits and once again becoming a Wall Street darling. Analysts say the company accomplished a rare feat: cutting down on expenses while simultaneously becoming a better retailer.

And the company has throttled up on new stores, with 24 to 27 projected for fiscal year 2012.

But that's only part of the post-recession story.

Whole Foods has also used its momentum to focus on other efforts like healthy-eating education and demanding higher standards from its suppliers (requiring better treatment of poultry and livestock, for example).

Those measures have the potential to filter down to the rest of the grocery industry, given Whole Foods' position as the leading natural foods grocer in the country.

It's a title that company leaders aren't prepared to relinquish any time soon.

And though founder John Mackey is now sharing CEO duties with Walter Robb, he remains the public face of Whole Foods.

Mackey chatted about the economic downturn, where Whole Foods is heading and the current anti-Wall Street protests.

These are heady times for Whole Foods - the stock price is near an all-time high, business has rebounded from the recession, and you're back in growth mode. How did the company recover so quickly?

With a lot of hard work by everyone at Whole Foods!

We threw ourselves into the task of making the shift from strong growth to a sudden recession. We cut spending, slowed and reduced new store openings, and made sure we had enough cash in the bank.

We renewed our focus on value, and really worked to show everyone that we have great prices throughout our stores.

We also increased our innovation and introduced several new programs to differentiate ourselves from our competitors.

Some of these include our 5-Step Animal Welfare Rating Program, our Seafood Sustainability Program and our healthy eating and wellness initiatives.

What was the biggest lesson you learned from the recession?

To minimize our debt and to make sure there is a lot more cash in the business than we think we might need.

We've become much more conservative in managing our capital and preserving our cash and liquidity.

Coming out of the recession, Whole Foods has ramped up its healthy-eating initiatives in a number of areas. Do you see a future when Whole Foods is almost a hybrid retailer and educational institution?

Anything is possible.

We're still innovating and evolving, from sustainable seafood guidelines to healthy eating and wellness clubs. We'll see where our customers take us.

You've also gotten more proactive in labeling products and demanding higher standards from suppliers, such as your meat suppliers, to name one. Is this an effort to try to spur a larger change in the grocery industry?

If our efforts mean that things will improve across the industry, that's absolutely a good thing. I think we've already done that in a number of areas.

America isn't nearly as healthy as we could be, and I hope Whole Foods will be successful in helping to raise the bar.

Whole Foods has become almost the standard bearer for a cultural shift in the way people eat. And I've heard you refer to the company as "America's healthiest grocery store." Do you feel increased responsibility with that title?

Absolutely, and I hope that we're not the only retailers who encourage our customers to learn as much as possible about their food, where it comes from and what it will do for them healthwise. Our country is suffering from obesity, diabetes, heart disease and other lifestyle diseases that a healthy diet can change. If we can help more people become healthy, then we've done very well.

You've never been shy about weighing in on current events. I'm curious if you had any thoughts on the Occupy Wall Street protests?

I'm sympathetic to some of their ideas, but not all of them.

For me, I think the issue is less about inequality in the distribution in income and more about the inequality in the distribution of free-market capitalism, of economic freedom.

I think they're partly protesting against a kind of capitalism that I don't believe in, either: "crony capitalism," whereby some businesses get special deals with the government, such as many Wall Street companies received with the financial bailouts.

I was opposed to these bailouts, and I believe that crony capitalism is doing great harm in our society, and we need to do everything we can to root it out.

However, I'm also a very strong proponent of "conscious capitalism," which I believe is where the future of business is headed.

When business is done consciously with a higher purpose and it works to create value for all of its major stakeholders - customers, team members, suppliers, investors and the larger community - it is a very beautiful and good thing.