Amazon Deal for Whole Foods Unites Maverick CEOs

Amazon.com Inc.’s designed $13.7 billion merger of Whole Foods Market Inc. unites dual nonconformist businessmen who will now have to mix really graphic approaches to make a understanding a success.


Continue Reading Below

The acquisition, if it goes through, will need Amazon Chief Executive Jeff Bezos and Whole Foods CEO John Mackey to work together to mix Amazon’s record and patron imagination with Whole Foods’ brick-and-mortar grocery expertise.

Messrs. Bezos and Mackey share some traits. The dual group — who usually got to know any other a few weeks ago, people informed with a matter contend — are iconoclasts whose outsize personalities made their companies. They pioneered new strategies in their industries — Mr. Bezos by changeable sell online, Mr. Mackey by popularizing health food — and they are greatly competitive, contend people who have worked with them.

But a dual founders also have neatly opposite strategies and missions that could infer tough to marry. Mr. Mackey’s Whole Foods, whose sales totaled $15.7 billion final year, has catered to wealthier business with boutique brands and hands-on patron service.

Mr. Bezos has appealed to a masses with low prices enabled in partial by centralization and automation. And Amazon, with $136 billion in income final year, has achieved distant incomparable success financially — putting Mr. Bezos resolutely in charge.

“On both sides, they will have hurdles with usurpation that they can learn from any other, and vouchsafing go of a ‘that’s how we’ve always finished it’ mentality,” says Forrester Research researcher Brendan Witcher, a former sell executive who now researches e-commerce and consumer behavior.

Continue Reading Below

The companies have pronounced tiny about how they devise to integrate, and declined to make their CEOs accessible for interviews. But during slightest some advantages of a multiple seem clear.

Mr. Bezos gains some-more than 460 stores opposite a U.S., a network that could let Amazon sell a private-label brands and inclination in stores, enhance a placement network, and accelerate a Prime Now and Fresh smoothness businesses.

Whole Foods gets entrance to Amazon’s information and technology, and a total shopping energy of Amazon Fresh and Whole Foods could win improved prices from grocery suppliers. Also, Mr. Mackey’s new trainer has been passive of skinny distinction margins, a acquire service after romantic financier vigour over distinction and other issues. Amazon has pronounced Mr. Mackey will sojourn CEO of Whole Foods.

Still, Mr. Bezos’s group is expected to investigate Whole Foods’ business practices seeking opportunities for change, former Amazon employees say. To improved contest with rivals including Wal-Mart Stores Inc., for example, Amazon expected will pull for reduce prices, new technology, and some-more uniform stores to save costs, they say.

Mr. Mackey has balked during romantic investors for criticizing Whole Foods as too delayed to innovate, notwithstanding a company’s new efforts to do so.

Mr. Mackey, a 63-year-old Texan who complicated truth and sacrament in college though didn’t graduate, built Whole Foods with his partners into a inhabitant code from one natural-food store in a groundwork of an Austin, Texas, house. They bought adult internal health-food chains, regulating collateral from investors to open large stores in a zone prolonged dominated by mom-and-pop shops. Whole Foods patched together 11 regions that were given liberty to rise their possess store concepts, signage and other flourishes.

“They are giveaway to try new things,” pronounced Mr. Mackey in a new interview. Employees investigate ideas inside and outward a association and don’t “have to ask accede from Austin,” where Whole Foods is based.

Mr. Mackey is some-more focused on a large design than enthralled in a sum of bland operations, former executives said. A despotic vegan, he likes to prepare dinners showcasing good eating to move tools of a association together, pronounced people who have attended.

Some contend that a close enlightenment has drawbacks. “It’s been a really paternalistic enlightenment where it’s a pursuit for life. If someone doesn’t deliver, we don’t indispensably humour a consequences,” pronounced Burt Flickinger, a grocery consultant.

At Amazon, opening is cherished and, as with other tech companies, employees come and go some-more frequently, former employees say.

Mr. Bezos, 53, warranted a grade from Princeton University in electrical engineering and mechanism scholarship and worked on Wall Street before first Amazon in his garage in 1994. He “has this singular ability to stay focused on a prolonged tenure vision, while also staying really focused on a details,” says Joseph Thompson, a former ubiquitous manager of sell during Amazon and stream clamp boss of selling and expansion during BuildDirect, a home-improvement online marketplace.

Despite Amazon’s size, Mr. Bezos tries to say a startup culture. Teams are typically kept tiny (defined by a ability to be fed with dual pizzas). There’s a despotic routine for building new ideas and inventing devices, that includes essay six-page papers for explanation, according to former employees.

When former Amazon worker Eric Heller met with Mr. Bezos and his group some-more than a decade ago to pull for requiring business to enter credit-card confidence codes while checking out, a CEO dug in on a details. The requirement would save costs by shortening a odds of fraud, though Mr. Bezos disturbed it would make exchange some-more cumbersome, Mr. Heller recalls.

“Until my mom knows what a [card corroboration value] is, we’re not putting it on a transaction page,” Mr. Bezos said, according to Mr. Heller, who has given founded consultancy Marketplace Ignition.

In meetings before a deal’s announcement, executives during Amazon and Whole Foods found they common a eagerness to let employees take risks and an importance on patron experience, according to people informed with a matter.

But some former employees and attention observers pronounced it will take time for a companies and founders to mesh.

“They will be blended. It won’t occur in 3 months though in dual or 3 years it will,” pronounced Tom Furphy, former conduct of Amazon’s consumables and Fresh divisions, and now CEO of Consumer Equity Partners, a venture-capital fund.

Write to Laura Stevens during laura.stevens@wsj.com and Heather Haddon during heather.haddon@wsj.com

(END) Dow Jones Newswires

June 18, 2017 12:10 ET (16:10 GMT)


Do you have an unusual story to tell? E-mail stories@tutuz.com