Sunday, December 7, 2008

We're Just Trying To Mind Our Own (Local) Business--Updated Sunday December 7th

The Oregonian has published their third piece in the last five days about Whole Foods Market’s demands for our internal emails, weekly sales data and marketing and growth plans. Here’s the link to it and here’s the link to the editorial that ran on Thursday and the story that ran on Wednesday.

We're very encouraged by the incredible amount of interest in this situation. We’ve heard from media outlets from all over the country and our blog continues to get lots of comments (although to be honest, in the last couple of days, it kind of looks like the same person is posting there over and over again).

Just to review the situation—Whole Foods Market is in a dispute with the Federal Trade Commission (FTC) about their takeover of Wild Oats. As it turns out, because of this dispute, Whole Foods has an opportunity to try and force us to give them copies of some of our most confidential financial records and strategic plans. We think there are lots of other ways they can make their case with the FTC without putting us at such a big risk. Want more information? Here’s the link to my original blog explaining the situation in detail.

There are a few things I’d like to comment about in today’s Oregonian story.

Whole Foods continues to insist that the documents they are demanding from us will be safe and that only their “outside lawyers” will see them. This is exactly same promise that was made last time files were subpoenaed in this case. Unfortunately, in the middle of that round, Whole Foods filed an amended motion to allow their “inside lawyer” to see the confidential information. They claimed that even though this “inside lawyer” was an employee of Whole Foods and was on their “Leadership Team”, it was okay for her to see everyone else’s private data because she wasn’t engaged in “competitive decision making”. Obviously, we’re very worried that might happen again.

Whole Foods also doesn’t seem to want to talk about the actions and the statements of some of their corporate executives which have led us and so many others to be concerned. If they hadn’t said stuff like, “…[m]y goal is simple – I want to crush them and am willing to spend a lot of money in the process.” and “...elimination of a competitor in the marketplace, competition for sites, competition for acquisitions, and operational economies of scale. We become the Microsoft of the natural foods industry.” and if their CEO John Mackey had not been caught posting derogatory information online about Wild Oats, using a made up screen name, we might not be quite as worried about what they planned to do with our private internal files.

The Oregonian mentions that Whole Foods is willing to make some “tweaks” to please us. That’s an accurate statement. Tweaks they are. Whole Foods is still demanding almost everything and is still insisting on the files we’re most concerned about.

The article states that we’re the only company looking to legally avoid the subpoenas. We have some new information about that. As of last Friday, only 50 of the 93 companies that have been subpoenaed have responded. The subpoena we got from Whole Foods demanded that we turn over all of our files to them on November 4th—over a month ago. I’m assuming that all the other companies had the same deadline. That means that almost half of the companies subpoenaed have not complied yet. I know for sure that some other grocers are waiting to see what happens with us before they decide what to do.

I’ve stated repeatedly, to the FTC and the media and Whole Foods that I think it’s silly to imagine, even for a second, that Whole Foods has some kind of monopoly on selling natural and organic foods in the Portland area. Having said that, I certainly am not an expert on the other 28 cities that are involved in this and I don’t have an opinion one way or the other about what should happen there.


37 comments:

Judy said...

I agree with the person who called it 'A new type of "phishing" expedition.' It's happened before to Aloha Airlines.

New Seasons is right to be concerned. The president of Mesa Airlines Jonathan Ornstein asked to see confidential records of inter-island Aloha Airlines. Then Mesa used those figures against them to compete by undercutting
fares to Aloha out of business. Had Aloha said NO this would not have happened.

Search "Aloha vs Mesa" under the website bizbites.honadvblogs
September 22nd, 2008 by Rick Daysog

The question of who’s to blame for the collapse of Aloha Airlines won’t be decided until this spring.

Aloha’s anti-trust lawsuit against Mesa Air Group and go! airline was originally scheduled to be heard next month but has been pushed back to April.

Based on the findings in federal court, it doesn’t look like there’s been a lot of discovery conducted in the case.

However, the mountains of evidence presented in Hawaiian Airline’s lawsuit against Mesa will be in the forefront of the anti-trust lawsuit, which alleges that Mesa misused confidential business information to drive Aloha out of business through a costly fare war.

The Hawaiian lawsuit, which Mesa settled by paying $52.5 million, uncovered the now-famous e-mail by former Mesa CFO Peter Murnane in which he stated of Aloha: “We definitely don’t want to wait for them to die, rather we should be the ones who give them the last push.”

Anonymous said...

I do not care for whole foods market. I live in an area that there is not a organic food store within 20+ miles and there is land for sale on the main strip. Please come to our area and open on.
Rt. 183 Leesport pa 19533 (bern twp)
Shannon Dillman
d5enzo@aol.com

Anonymous said...

Natural-Specity Foods Memo is reporting that Sunflower Farmers Market has responded to the Whole Foods petition.

Can read the story here:

http://naturalspecialtyfoodsmemo.blogspot.com/2008/12/retail-memo-fast-growing-and-scrappy.html

They also have a post about the high-priced legal and talent and lobbyists Whole Foods has hired for the FTC case involving the subpoena. Some interesting characters for sure.

Here:
http://naturalspecialtyfoodsmemo.blogspot.com/2008/12/retail-memo-whole-foods-market-retains.html

Brian, why are the other 94 or so retailers so silent about this? Do you know who they are? Have talked to them? Seems they should ban together.

Michael B-Portland.

Paul said...

This is all very disturbing, and an example of items that go in the "downside" column of being a responsible local business. New Seasons, being one of the best companies around (socially, environmentally, and economically), is a target for the big dogs like Whole Foods because it not only says the right words, but actually puts those words into action.

There are probably good things about Whole Foods (to be honest, I've only shopped there a couple of times for a few items), but the history of their deviousness (i.e. their CEO's pseudonomous blogging) and slash-and-burn greed (see the internal WF memo's cited by Brian Rohter) doesn't leave me with any good feelings.

I'm not an attorney, and as an outsider looking in I don't know what reality is and isn't. But I do know when something smells rotten, and this one stinks. I don't mind having Whole Foods as an option, and people are free to shop wherever they want. I'll stick with New Seasons because I like their business philosophy, their products and prices, their staff, their contributions to rebuilding a local economy, and very importantly, their honesty.

Hang in there New Seasons, and let us know if it will be "one if by land, or two if by sea!"

Paul

Sherry said...

Brian, Lisa, and New Seasons Community: New Seasons Market serves the greater Portland Metropolitan area in ways that Whole Foods cannot. When I go shopping anywhere else it is a chore; when I go to any New Seasons I know I will find genuine helpfulness, excellent products, support for, local agriculture, sustainability & social causes, a sense of community, and a lot of fun on top of all this.

It amazes me that FTC and Whole Foods have any clout legally using such egregious tactics.
Competitiveness in business should not be linked to finding "legal" means to spy and misuse information about one's competitor.

Whole Foods might provide some good products, but based on its recent activities, it appears to be a toxic example of business. I don't shop in toxic places.

Sherry

Jon Radmacher said...

More power to New Seasons on this. What is Whole Foods possibly hoping to accomplish, other than find out a competitor's confidential information, to help it compete? New Seasons has said that there's no competitiveness problem in Portland, so what is the possible reason for this info? If Whole Foods' CEO hadn't so clearly demonstrated his anti-competitive news about Wild Oats, before the merger, they wouldn't be here. It's their own fault.

Mary in Portland said...

Brian, I've duly noted that you like M&M Peanuts (but you really should consider some fair-trade and organic alternatives!), and will bring you some if you get locked up....

Seriously, though, isn't this the sort of case where the judge should appoint a Special Master (a neutral court official) to review the documents and make a finding about them without divulging the contents?

Will follow the developments with interest.

Mary in Portland

More Red Meat said...

Why so angry, considering the abundance of bliss?

New Seasons Rocks! said...

People who shop at Whole Paycheck are dumb for falling for the "organic" sham! New Seasons shoppers are smarter than that, and I wish that there was a New Seasons in every city in the world, so everyone can see how much better it is!!

Don't let those idiots bully you into doing what is right. We're behind you 100%.

Anonymous said...

This sucks. We've got a Whole Foods just two blocks away, but now I'm going to have to walk 12 blocks to Zupans.

Tim in SE said...

I hope this puts Whole Foods out of business forever. That would teach them a lesson or two!

I love my New Seasons and would do whatever it takes to help you bring down those hippies. Who's interested in picketing and putting up a real stink in front of one of their stores? I have a friend who works at channel 8 and I can probably talk him into getting a camera there.

Jennie F said...

Hi folks, just wanted to update you that this conversation is heating up on local Portland foodie blog Portlandfoodanddrink. Looks like WF is back to posting their official response in the comments section. Please read: "Whole Foods Gall Reaches New Levels" is you haven't already.

Anonymous said...

Whole Foods filed a lawsuit against the FTC today, according to the Natural-Specialty Blog you have linked. And John Mackey is doing a big press conference in DC tomorrow.

Read it here: www.naturalspecialtyfoodsmemo.blogspot.com

Will that effect your subpoena? The lawsuit?

Erin said...

this is why i love portland-local business are really supported by you!....I used to livein PDX about 9 years ago and am a San Diego native. sighhh....I personally shop at trader joe's because there are no natural food stores except in Ocean Beach(People's Food Market which is great, but far away from me). Also, I believe Henry's marketplace is owned by Whole Wallet? not sure... Good Luck New Seasons! you have my back.

Cricket said...

I'm throwing a whole lotta' positive energy and support your way from Wisconsin - I work in marketing for our natural food cooperative here and am disgusted by Whole Foods tactics. Needless to say, they cannot be trusted and it's outrageous that they might have access to your confidential competitive documents and plans. Good luck and good luck to the the other businesses that are dealing with this as well.

Incredulous said...

The best thing is for nobody to be successful, since success is the death knoll for the public image of any business. Just like a woman who succeeds in business, there must be something nefarious happining if a company becomes "too" successful (Whole Foods must have been sleeping with the boss).

I wish New Seasons all the success in the world (and the violent death that eveyone will wish upon them becuase of their success).

If Whole Foods is filing a lawsuit agains the FTC, then this is NS's opportunity to stand behind the claim that the FTC is wrong and should not get their way, even though they're not willing to help in that effort.

What will probably happen is that New Seasons will sit on the sidelines and root for the FTC because all they want to do is bring down their competitors. They're just another business, afterall.

Laura P said...

Yet another reason to hate Whole Paycheck--oops, I mean Whole Foods.

New Seasons, keep on fighting the good fight. We are lucky to have you here in Portland.

maria said...

Count me in as another New Seasons' supporter. I am not going to shop at Whole Foods ever again. Shame on them.

thyme11 said...

I'm the first one to always side with the underdog. But that doesn't mean underdogs don't parse the truth or pick out only the points that favor their side.

I'm fully prepared to show my support by not shopping at WF. I went to the extent of going to WF to get more info and tell them I'm not shopping their anymore. Needless to say, the innocent employees don't need this.

They printed out a long post by a local exec. Their argument sounds as valid as does NS. So, what is the conscious citizen to do? Is someone not telling the whole truth?

They argue that NS is one of 93 different business in 29 different markets. The FTC makes an allowance for businesses to protect particular secret information. Only the lawyers see it, never the company execs. To the FTC and WF, this is standard procedure.

In fact, much of the blame seems to lie with the FTC because the deal was done and then reopened, forcing Whole Foods' hand. So they say, sure.

But why can't WF use info that's publicly available? Why can't they go to the store and look at the shelves to see what's for sale and for how much?

I think the whole thing sucks. But I want to put my money where my mouth is. And for now, maybe I'll boycott both businesses till I know more.

In other words, companies get so good at spin. I don't want tugs on my heart strings to force my decision. I want to hear the truth.

Is a store I love (NS) merely defending themselves just as anyone would who wants to win something? Sounds reasonable to me. But not if I'm unnecessarily punishing another store.

What I wonder is, is this something you just deal with when you're choosing to play the game of business?

I don't feel sorry for WF. I just don't want my chain jerked.

Incredulous said...

Thank you, Thyme 11, for at least considering both sides of the story. Knee-jerk reactions don't do anybody any good on either side.

While I wish you came out more strongly in Whole Foods' defense, I like the fact that you acknowledge that both sides will put their spin on the story, that the issues is more complex than one company picking on another, and that the consumers are caught in the middle and being force to choose sides based on misleading information.

It saddens me to see so many of the posters here come to such dramatically decisive conclusions based on so little information. I disagree with several of your points, but the fact that you reached those conclusions by asking questions gives me hope that reason is not entirely dead.

donna said...

Whole Foods is evil, and this looks like a ploy to get competitive information on the sly.

Evil, evil, evil company. And bring back my Wild Oats lemon cookies, evil company!

Candy Man! said...

I love you, New Seasons! I love you more than coffee cake and red licorice!

Anonymous said...

Many of the people responding simply don't know all the facts. The real culprit in this case is not Whole Foods, but rather the FTC. They are on a vendetta against Whole Foods for some reason, and to say that the natural and organic market has been harmed by the merger is ridiculous. The organic and natural business in Portland is very strong, and New Season's is a great example of that. So rather than attack people trying to do business, employ people, pay taxes, etc., theanger should be directed at the FTC. Write your elected officials and tell them you want the FTC to stop wasting taxpayer money on something that is not an issue. If its OK for Mobil and Exxon to merge, or Cirrius and XM radio, than why not Whole Foods Market and Wild Oats? Its' time to tell them to back off and let the market sort things out.

Dandelion said...

Why can't Whole Foods just get a very legally solid statement from New Seasons saying that New Seasons does not feel subjected to monopolistic pressures from Whole Foods?

It would save a lot of time and trouble.

Most Portlanders don't shop at Whole Foods, New Seasons, Food Front or People's. There is a vast market out there. There is enough for everyone. Those folks need better food.

Lets keep the big picture in mind.

What do we want here?

Energy follows attention.

We actualize what we visualize.

Keeping a cool head makes it possible to think clearly and supports the immune system.

Beneficent forces in the Universe support those who are generous and grateful.

New Seasons has better food, lower prices, and a vastly more life supporting atmosphere. New Seasons will be here for a long time. Portlanders are savvy and will see to that.

Whole Foods, take note, the end does not justify the means.

I only bought a few things at Whole Foods if i was really hungry. Now i will just fast. It felt cold and sad there anyway.

The best food is the wild food, and it is free.

Happiness, Health and Abundance for All.

I love Nude Squeezin's! said...

I hate you, Whole Foods! You're a bad man, and you hate good things! Bad, bad, bad, Whole Foods! You go sit in the corner now and think about what you've done to all of the children and puppies that you've hurt with your hateful actions!

Uncle Beefy said...

Hey there :) Heard about all of this from an article posted on Gourmet.com. My heart goes out to you and am sending positive thoughts (while suppressing my rage at Whole Foods). Keep up the good fight!

Anonymous said...

Gimme a break! Your ridiculous comments about one company being bad and the other being angelic are immature and miss the point. You paint New Seasons as an altruistic company that harbors no thoughts about fiercely competing against anyone that sells the same or similar items. That is the nature of business! Speaking of Nature's, didn't your hallowed New Seasons leaders sell out to GNC, a large, national company? Hmmmm...

JB Becker said...

I find Whole Foods' actions despicable. I definitely would not trust that the documents would only be seen by "outside counsel". I can say that I will keep shopping exclusively at New Seasons and will encourage all my friends to boycott Whole Foods. At times like this in the economy, we need to support local businesses who take care of their employees, look out for the environment, and offer healthy alternatives to their shoppers. I don't need to shop anywhere else because I can find everything I need at New Seasons.

compassionate NS shopper said...

"They're not from here."

"They don't have the same values."

"How do I know if I can trust them?"

"Different is bad."

Are we talking about grocery stores or terrorists? Substitue "Whole Foods" with "Islamic" and it's the same garbage that you hear from bible thumpin', "proud to be american," "our country is better than your country" people that most "sane" people would find offensive. Blind assumptions, jumping to conclusions, prejudice - it's all there!

Dance, puppets, dance! Work yourself into a frenzy and hate, hate, hate!

Kersten said...

Wow, I can't believe Whole Food thinks it is fair to request such documentation and further their drive to be a monopoly in the natural foods market. I love New Seasons and other natural stores around the Portland area, and I think it is a shame that WF is looking to put everyone out of business. One thing I love about Portland is how individuality shines and uniquenss is rewarded; doesn't WF see that we'll get sick of their monopoly if they get rid of everyone else?

Rock on New Seasons :) I love your stores and wish one were a bit closer to my house.

Anonymous said...

Natural-Specialty Foods Memo has some new posts on the issue.

www.naturalspecialtyfoodsmemo.blogspot.com

Brian, is it true Whole Foods tried to buy New Seasons a few years ago?

Michael B. - Portland

Anonymous said...

Here is an interesting article on answering discovery. I am not a lawyer and have no idea about how accurate it is but it might be worth a read or you can give it to your attorney. It gives lots of possible legal reasons not to answer these types of questions in discovery.

http://web.archive.org/web/20040121210338/http://www.doprocess.net/articles/resource+pattern+interrogatories.HTM

Anna said...

My email to WF:
I have just heard about your demands for New Seasons' internal emails, weekly sales data and marketing and growth plans.
Wow, you don't know your market.
I am a Texan who grew up shopping at Whole Foods and was delighted with your store here. I was glad you took over Wild Oats: the place was horrible. Now, that doesn't mean you get to mess with the whole town. One of the best things about Portland is its bevy of awesome grocery stores. Some things you get at one, some at another, but the variation and quality is unsurpassed until recently.
Your transition into Wild Oats is not complete. You have problems with your distributors that have made me drop several product lines and your behavior towards my beloved New Seasons is causing me to drop you! Additionally, I guarantee I won't be the only one to do so in an area that concerns itself so much with its sources of food. You can play that way in Texas, but it won't fly here. I hope sincerely that you change your minds and practices. Until then, goodbye.
Anna Martinez

A concerned Customer said...

My email to Whole Foods:

You leave New Seasons alone! Go away now! I said go away! Your food tastes funny, and it's not the local food that I have grown to love like New Seasons has! So take your lawyers and your funny tasting food and scram, you big MEANIE!

Sincerely,

A concerned customer.

Anonymous said...

Looks like the judge ruled against New Seasons today.

Breaking News: Judge Orders New Seasons Market to Comply With Whole Foods' Subpoena and Submit Sales Data, Financial Records and Other Trade Secrets

Link:
http://naturalspecialtyfoodsmemo.blogspot.com/

This is wrong.

A concerned customer

Anonymous said...

Morons.

Leisa said...

I am happy that you have reached a compromise that you think is doable. However, I am still so concerned that there are no laws in place to protect you from devious underhanded monsters like Whole Foods. I also will never shop there. My heart is with and for local businesses like New Seasons who run their business with integrity who support local farmers and who are trying to bring the freshest food to the community. I just don't want there to ever be a chance that someone can come along and bully you out of business. That would be a sad day. Hang in there and keep on keep'in on
Leisa Hart
Portland, Oregon