Whole Foods 2008 Annual Report Download - page 20

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asked to complete a confidential, third party-administered team leader survey, which provides them with an opportunity to
give their leaders constructive feedback.
We believe our success is dependent on the collective energy and intelligence of all of our team members. We strive to create
a work environment where motivated team members can flourish and reach their highest potential, and where they are
inspired by work that provides them with a greater sense of purpose and mission. For many team members, their job is an
extension of their personal philosophy and lifestyle. Together, we go to great lengths to satisfy and delight our customers.
Team members are involved at all levels of our business. We strive to create a Company-wide consciousness of “shared fate”
by uniting the interests of team members as closely as possible with the interests of our shareholders. One way we reinforce
this concept is through gainsharing. Our gainsharing program rewards things such as labor productivity that team members
can control, giving them a direct stake in the success of our business. We also encourage stock ownership among team
members through the following programs:
• Team Member Stock Option Plan. All full-time and part-time team members are eligible to receive a grant of stock
options each year. The annual grant has two components: (i) Annual Leadership Grants to recognize and incentivize
team member performance; and (ii) Service Hour Grants to recognize team member service to the Company. In
2008 our Board of Directors awarded approximately 2.2 million options to more than 17,400 team members. Of
these stock options, 96% were granted to non-executives, with 47% awarded as Service Hour Grants alone.
• Team Member Stock Purchase Plan. Through bi-weekly payroll deductions, all U.S.-based non-seasonal team
members with at least 400 service hours may elect to purchase unrestricted shares of our stock at 95% of market
value on the purchase date. The shares are purchased for the plan participants on a quarterly basis.
• Team Member 401(k) Plan. Whole Foods Market stock is an investment option within the Company’s 401(k) plan.
Store Description
We do not have a standard store design model. Instead, each store’s design is customized to fit the size and configuration of
the particular location and community in which it is located. Our culture and philosophy is one of continual innovation and
experimentation, and successful experiments are voluntarily picked up and improved upon by our stores. We strive to
transform food shopping from a chore into a dynamic experience by building and operating stores with colorful décor, well-
trained team members, exciting product mixes, teams of in-store chefs, ever-changing selections, samples, open kitchens,
scratch bakeries, hand-stacked produce, prepared foods stations and European-style charcuterie departments. To further a
sense of community and interaction with customers, our stores typically include sit-down eating areas, customer comment
boards and customer service booths. We have “Take Action” centers for our customers who want to be informed on
important issues relative to environmental, legislative, food safety and product quality issues that can directly affect our
customers’ health and well-being. In addition, some stores offer special services such as massage, valet parking and home
delivery. We believe our stores play a unique role as a third place, besides the home and office, where people can gather,
interact and learn while at the same time discovering the many joys of eating and sharing food.
Purchasing and Distribution
Our buyers purchase products for retail sale from local, regional, national and international wholesale suppliers and vendors.
The majority of our purchasing, an estimated 90% of the total center store, occurs at the regional and national levels. This
enables us to negotiate better volume discounts with major vendors and distributors, while allowing our regional and store
buyers to focus on local products and the unique product mix necessary to keep a neighborhood market feel in our stores. We
are increasingly focusing more of our purchasing on producer-direct and manufacture-direct programs, and we remain
committed to buying from local producers that meet our high quality standards.
We own two produce procurement centers which facilitate the procurement and distribution of the majority of the produce
we sell. We also operate four seafood-processing and distribution facilities, a specialty coffee and tea procurement and
brewing operation, a confectionary, and nine regional distribution centers, which distribute a full range of products to our
stores across the U.S., Canada and the United Kingdom. In addition, we have five regional commissary kitchens and eight
bakehouse facilities, all of which distribute products to our stores. Other products are typically procured through a
combination of specialty wholesalers and direct distributors.
United Natural Foods, Inc. is our single largest third-party supplier, accounting for approximately 32% of our total purchases
in fiscal year 2008. In November 2006, we extended our long-term relationship with United Natural Foods as our primary
supplier of dry grocery and frozen food products. Our seven-year agreement allows us to concentrate our capital and