The Unexpected Way Walmart Inspired Whole Foods In The '80s

The idea that the success of Whole Foods can be attributed to Walmart might seem counterintuitive. However, according to Whole Foods co-founder John Mackey, his company would never have reached its present heights were it not for Walmart's unlikely assistance.

At first, one might think that the similarities between Whole Foods and Walmart are relatively few. Granted, each are major corporate entities — Whole Foods was acquired by Amazon in 2017 for almost $14 billion, while Walmart remains the world's biggest private employer and company in terms of revenue — both of which have faced ugly accusations of union-busting. Yet the public image of Whole Foods, with its commitment to natural produce and healthy eating, would seem to set it apart. It's this image, however, that Walmart is indirectly responsible for.

Speaking to podcaster David Senra earlier this month, Mackey explained that Walmart's 1988 transition into groceries created tremendous turmoil within the industry, as other supermarket chains desperately attempted to keep up with Walmart's low prices — a race that quickly yielded negative consequences on working conditions, customer service, and the stores themselves.

Since the first Whole Foods opened in 1980 in Austin, Texas, following the amalgamation of two preexisting natural grocers, it had established a far different reputation. As Mackey told Senra, "One venture capitalist said: 'You're a bunch of hippies selling food to other hippies.' That's true, it was true at one point." But Mackey was quick to note the unfortunate impact Walmart was having on the American consumer's shopping experience.

"What ended up happening is those supermarkets made their stores less attractive ... to middle-class, upper middle-class women who do most of the food shopping," Mackey said. "They wanted to come into a store that was pretty, that was beautiful, with people that gave them good service, that took their groceries to their car." The other chain stores were "so obsessed with stopping Walmart," Mackey said, that it allowed Whole foods to "compete on a different framework."

Whole Foods emphasized the quality and healthy nature of its produce, which it endeavored to sell in an environment more pleasant and welcoming than the warehouse-like, severely-lit places many other stores became. As a result, Whole Foods was able to carve out a customer base among more affluent and conscientious shoppers, those happy to tolerate higher prices in exchange for the benefits and amenities Whole Foods offered. As a satisfied Mackey put it: "We were not just in our own little Hippieville anymore."