‘I ultimately am not afraid to get fired': Leaked audio captures Whole Foods CEO John Mackey describing clashes with Amazon

  • Whole Foods CEO John Mackey says the grocery chain's same-store sales are growing again under Amazon, but that the two companies have had "many, many" clashes where he has had to "speak truth to power" and Amazon has "backed off."
  • Mackey made the remarks Tuesday during an internal company-wide meeting, according to audio of the meeting obtained by Business Insider.
  • "I ultimately am not afraid to get fired ... so that gives me a position of strength to speak truth to power when it’s necessary to do so, and I’ve done it many, many times," Mackey said.
  • Mackey also slammed media reports, saying "they just make things up."

Whole Foods CEO John Mackey said Tuesday that the company's same-store sales are growing again under Amazon, which purchased the grocery chain 10 months ago in a $13.7 billion deal.

"It's been an incredible year," Mackey said Tuesday during a town-hall style company-wide meeting, according to audio of the meeting obtained by Business Insider. "Our increase in sales has been far greater than I anticipated and it’s continuing."

Where Amazon may build its HQ2
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Where Amazon may build its HQ2

DC is near the the "bull's-eye of America's internet." 

Northern Virginia is attractive for tech firms due to its proximity to Data Center Alley, where 70% of the United States' internet traffic flows through. That means more efficiency and reliability, as well as cheaper power, according to Business Insider's Hayley Peterson.

Amazon could be looking at a specific spot right in the center, on the border of Loudoun and Fairfax counties, near Washington Dulles Airport and the DC Metro, for its new headquarters.

It's also close to where Amazon is planning a 600,000-square-foot data-center campus as well as its new Herndon, Virginia Amazon Web Services office. 

Photo credit: Business Insider

An article on a local news site in Arlington, Virginia, blew up overnight, and the site says the views came mostly from what appears to be an internal Amazon.com page. 

In February, a local news site called ARLnow.com said it saw an unusual spike in traffic to an article from December titled "County Wins Top Environmental Award from US Green Building Council" explaining how Arlington County was the first in the US to be selected for an environmental award.

The site says the story saw a spike of about 6,000 pageviews, mostly referred from what it identified as an internal Amazon.com page.

ARLnow.com speculated that the page was linked closely with Amazon's search for the city for its second headquarters, dubbed HQ2, and that the traffic spike indicated Arlington was being considered seriously. 

Photo credit: Getty

Amazon has drastically increased its lobbying efforts. 

Amazon has rapidly expanded its Washington lobbying efforts in the past five years, according to Bloomberg.

The company has increased its lobbying spending by more than 400% over that time. It has also widely expanded both the number of issues and the number of entities it lobbies, according to Bloomberg. To do this, it has nearly doubled the number of lobbyists it employs.

The company is reportedly fighting to be seen as a job creator rather than a job taker. It's working to have more influence in Washington as it expands and moves rapidly into areas like drone aviation, cloud computing, and grocery.

In 2015, Amazon hired Jay Carney — the former press secretary under President Barack Obama — to oversee corporate affairs, and he now oversees the Washington policy office, which opened in 2014.

These moves are also powerful signifiers of a desire to have more influence in Washington. One way Amazon could have more influence is by relocating some of its corporate operations in or near the city. It could do that with its HQ2 project, which promises to bring significant investment to the chosen area. 

Photo credit: Getty

Three of the 20 remaining HQ2 contenders are in the DC metro area. 

Northern Virginia and Montgomery County, which border Washington, DC, are the only proposals under consideration that are not from a major city.

Additionally, Washington is the only metro area with three separate locations appearing on the short list.

That may indicate that Amazon has selected the area as the most desirable for HQ2.

The battle among the three locations is likely to be the fiercest, as they won't be able to point to the region as a differentiating factor and must throw in their best incentives. No other locations on the company's list are as close to one another. 

Photo credit: Business Insider

Amazon CEO Jeff Bezos already owns the district's largest home.  

In 2017, The Washington Post revealed that Amazon CEO Jeff Bezos was the buyer of two mansions in the Kalorama section of Washington.

The property totals 27,000 square feet, and Bezos reportedly intends to turn it into a single-family home that would be the largest in the city. The deal closed for $23 million on October 21, 2016. Kalorama is a popular destination for well-heeled Washington residents.

A recent profile in Washingtonian magazine also painted Bezos as someone who has gotten used to the scene in DC, and may be looking for an easy excuse to spend more time there.

If Washington is already a place where Bezos likes to spend his time, it stands to reason it's a top choice for HQ2. 

Photo credit: Getty

It's a desirable city for other reasons, too. 

There are a few other reasons Amazon may choose DC.

It meets all the criteria the company set for HQ2, including those for transportation, education, workforce, and livability. It has a well-respected higher-education system, and there's plenty going on that makes it a desirable place for a younger workforce to live. 

Photo credit: Getty


But the relationship with Amazon has also come with many challenges, he said. 

"I’m sure that Amazon has probably gotten more disagreement from me than any other single person, and possibly more than everyone else combined," Mackey said. "I have the least amount to lose: I have done this for 40 years, I am financially secure, I love Whole Foods."

"I ultimately am not afraid to get fired so — not that I think they are going to fire me — but I’m not afraid of it, so that gives me a position of strength to speak truth to power when it’s necessary to do so, and I’ve done it many, many times," he said. "And that’s been a good thing because Amazon has listened and they have been very respectful and they have backed off." 

Mackey didn't go into detail about the nature of the companies' disagreements.

In response to an employee question about what could change about Whole Foods' culture going forward, Mackey said the company's principles and values would remain the same, but "pretty much everything else we can change." 

"This is the thing people are most afraid of, it's like, they love Whole Foods so they don’t want it to change," he said.

But in a merger, like in a good marriage, both parties will change over time, he said. 

"I would say that those of you that are going to be married — and happily married — are going to change," he said. "You may not intend to, but I promise you, if you don’t change you will not stay married. It just comes with the territory — particularly if you are a man you will not stay married."

Mackey slams media reports, saying 'they just make things up'

Mackey said that overall, Whole Foods has made "really good progress" under Amazon. 

"I’m overall pleased with where we’re at," he said. "Does that mean I love absolutely everything about Amazon? No. I don’t. I don't love absolutely everything about my wife either, but on balance, I love like 98%. That’s a pretty good ratio based on my previous relationships."

Whole Foods doesn't publicly report sales figures now that it's owned by Amazon. When the companies announced the planned merger one year ago, Whole Foods' quarterly same-store sales had dropped nearly 3%.

Mackey didn't reveal any specific numbers related to sales growth during the meeting, other than saying that the growth is higher than what the media has reported.

"It’s much better than the media reports because they don’t have any data so they just make things up," he said. It's unclear what reports he was referencing.

Whole Foods plans to cut prices even further

Mackey said the biggest drivers behind Whole Foods' same-store sales growth has been the free delivery of Whole Foods groceries through Amazon Prime Now, which is now available in about half of Whole Foods stores, and the grocer's new discounts for Prime members.

The company has also been working with Amazon to improve profit margins by minimizing out-of-stocks and leveraging its scale to get lower prices from existing suppliers, other Whole Foods executives said during the meeting.

"Prime affinity and Prime Now are the two biggest initiatives, but also reducing our prices — we are going to be doing more of that over time," Mackey said. "Getting things to our customers at lower prices while hopefully not reducing our quality standards and our service has been a major goal in the first year."

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SEE ALSO: Amazon is giving Prime members a 10% discount at Whole Food, and it just hit 10 more states

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