Whole Foods 2008 Annual Report Download - page 6

we are actively working to drive down our average
development cost per square foot. We believe we have
disciplines in place for managing our cost of goods
sold and direct store expenses in this challenging
sales environment, and excluding estimated FTC-related
legal costs, we expect G&A expenses of approximately
3.1% of sales in
fiscal year 2009.
While we have owned and operated the Wild
Oats stores for over a year, the FTC has begun
administrative action in their own internal court
system challenging the completed merger. A trial is
scheduled to begin in April; however, we have asked
the U.S. District Court to issue an injunction barring
the FTC from holding its own internal administrative
trial and from reviewing the case itself. While this
would still allow the FTC to re-file the case in U.S.
District Court, we believe it would result in a non-
biased decision—something we don’t believe can
be achieved in the FTC’s own internal administrative
court system. We are hopeful that we will successfully
resolve this issue over the coming year and be able
to dedicate our full attention to operating stores once
again, instead of wasting time and money dealing
with government regulators concerning a merger
we completed many months ago after receiving
permission to do so from the U.S. District Court.
Our business model has been highly successful,
and with fewer than 300 stores today, we remain
very bullish on our long-term growth prospects, as
demand for natural and organic products continues
to grow and as our company continues to evolve.
We have a loyal customer base that is aligned with
our mission and our core values. We are dedicated
to maintaining our leadership position as the
authentic retailer of natural and organic foods. We
believe it is this commitment to continuing to raise
the bar that reinforces our authenticity and makes
us the choice for customers aspiring to a healthier
lifestyle. Our strengthened balance sheet, combined
with our strong cash flow from operations, gives
us the financial flexibility to manage through these
difficult economic times while continuing to invest
prudently in our long-term growth. From both an
operational and capital expenditures standpoint, we
have confidence that our current store development
pipeline is very manageable over the next four years,
and we believe the investments we are making in
our new, acquired and existing stores will result in
substantial earnings growth in the near future.
Subsequent to the end of the year, we added four
new members to our board of directors, bringing
the size of the board to ten. These new board
members bring unique wisdom and complement the
experience of our current board members. In this
challenging economic environment, we feel fortunate
to have this fresh addition of intellectual capital.
2008 has been our most challenging year, but it
has created an opportunity for us to reexamine all
aspects of our business and refocus on what really
makes us great and sets us apart in the marketplace.
I believe that we have made several excellent
strategic decisions that will create long-term value
for all of our stakeholders. We greatly appreciate
your support and look forward to getting past this
recession and back to an upward growth trajectory.
Our motto—Whole Foods, Whole People, Whole
Planet™—emphasizes that our vision reaches far
beyond just food retailing. We look forward to
sharing our vision with the rest of the world.
With warmest regards,
John Mackey
Chairman of the Board, Chief Executive Officer,
and Co-Founder