Is Whole Foods Too Expensive? A Response from Co-Founder John Mackey

Whole Foods co-founder and co-CEO John Mackey said it’s a complaint he hears all the time: the food at his stores is too expensive.

But if you think that’s true, Mackey said, you can always shop somewhere else.

“If people think we’re too expensive or the quality’s not very good or the services aren’t good… they have plenty of alternatives in the marketplace,” Mackey said this morning during an appearance on KQED’s Forum. “We don’t make everybody happy. But who does?

“We do have a $12 billion business, so somebody likes us.”

The cost of shopping at Whole Foods was one of many topics discussed during an hour-long Forum interview with Mackey this morning. The interview is generating heated conversation online, as shown by the dozens of comments on the Forum website. During the discussion Mackey also talked about his free-market business philosophies as well as criticism over his comment on NPR comparing President Obama’s health care overhaul to fascism. He expressed regrets for using that word.

“You can’t use that word in an American society,” he said. “I don’t think I’d even use it in a Scrabble game going forward.” Some Bay Area residents, however, may be most interested in his thoughts about the cost of groceries at Whole Foods. There are nearly 30 locations in the Bay Area, and while the corporation is based in Austin, Texas, its focus on natural and organic foods has earned it many customers in health-conscious California.

Mackey noted that Americans are spending less of their income today on food. His comment is supported by data released by Gallup in 2012.

On a relative basis, after adjusting prior years’ data for inflation to 2012 dollars, Americans are spending less on food now than in the past. The average $151 Americans report spending each week on food today is down from the inflation-adjusted $157 to $214 range Gallup found throughout the mid- to late 1980s, the last time it regularly asked the question.

Adjusting the historical data to 2012 dollars also reveals that Americans’ weekly spending on food began to decline in the 1970s, after rising to a high of $234 in 1966 and 1967. That generally downward trend was interrupted by a spike in 1987.

Americans also can choose to spend less money on food by eating healthier, Mackey said.

“I don’t spend that much money on food because I cook,” he said. “I buy whole foods. I’m vegan. I eat just plants. I just don’t spend that much money. It’s about shopping intelligently. And Whole Foods has a lot of value foods in our stores.”

Of course, Whole Foods sells costlier food as well. Mackey said that’s the price consumers pay for the quality offered by the store.

“Whole Food is trying to sell higher quality food, and to a certain extent, just like in any other business, the higher quality stuff does cost more,” he said.