Whole Foods CEO says Amazon helped his company escape 'whole paycheck' trap

Key Points
  • Whole Foods was derisively called "whole paycheck" because of its expensive products.
  • Some analysts believe the discounts at Whole Foods are not as steep as reported.
  • Food Business News reported on Mackey's comments from last week.
Whole Foods CEO says Amazon helped escape high-priced image
Whole Foods CEO says Amazon helped escape high-priced image

Amazon's acquisition of Whole Foods has instantly helped the high-end grocery chain shed its "whole paycheck" nickname, said CEO John Mackey, according to a report in Food Business News.

At a conference last week, Mackey said he couldn't elude the moniker and even compared himself to the magician Harry Houdini, who's best known for his sensational escape performances.

"One reason the merger came about is Whole Foods was in a trap, and I couldn't quite figure how to get out of that trap," Mackey said at SNAC International's Executive Leadership Forum, which Food Business news covered. "We escaped the trap. I feel a little bit like Houdini."

Mackey's comments suggest that Amazon will likely continue to cut prices at Whole Foods. Despite getting steep discounts — by as much as 43 percent– on select products in August, Whole Foods only put a 1.2 percent average price cut on the 114 products tracked by Gordon Haskett analyst Charles Grom one week after the deal closed.

If Amazon does cut prices broadly, it will help attract more more middle- and low-income consumers. That's important for Amazon, which needs to expand Prime memberships beyond higher-income households.

Mackey didn't say much about Amazon's long-term pricing plan for Whole Foods at the event. He compared it to a musician who hasn't finished writing the song, according to the report.

"We're still figuring out what we're going to do," Mackey said.