Whole Foods 2009 Annual Report Download - page 26

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eating and sharing food. A widespread health epidemic may cause customers to avoid public gathering places or otherwise
change their shopping behaviors. Additionally, a widespread health epidemic could also adversely impact our business by
disrupting production and delivery of products to our stores and by impacting our ability to appropriately staff our stores.
Unions May Attempt to Organize Our Team Members
From time to time, unions have attempted to organize all or part of our team member base at certain stores and non-retail
facilities. Responding to such organization attempts is distracting to management and team members and may have a
negative financial impact on a store, facility or the Company as a whole.
Unfavorable Changes in Government Regulation Could Harm Our Business
The Company is subject to various international, federal, state and local laws, regulations and administrative practices
affecting our business, and we must comply with provisions regulating health and sanitation standards, food labeling, equal
employment, minimum wages, and licensing for the sale of food and, in some stores, alcoholic beverages. Our new store
openings could be delayed or prevented or our existing stores could be impacted by difficulties or failures in our ability to
obtain or maintain required approvals or licenses. Changes in existing laws or implementation of new laws, regulations and
practices (e.g., health care reform and/or card check legislation) could have a significant impact on our business.
The USDA’s Organic Rule facilitates interstate commerce and the marketing of organically produced food and provides
assurance to our customers that such products meet consistent, uniform standards. Compliance with this rule could pose a
significant burden on some of our suppliers, which may cause a disruption in some of our product offerings.
We cannot predict the nature of future laws, regulations, interpretations or applications, or determine what effect either
additional government regulations or administrative orders, when and if promulgated, or disparate federal, state and local
regulatory schemes would have on our business in the future. They could, however, require the reformulation of certain
products to meet new standards, the recall or discontinuance of certain products not able to be reformulated, additional
record keeping, expanded documentation of the properties of certain products, expanded or different labeling and/or
scientific substantiation. Any or all of such requirements could have an adverse effect on our results of operations and
financial condition.
Our Results Are Subject to the Risks of Doing Business in Other Countries
Though small as a percentage of our total sales, the Company’s international operations are subject to certain risks of
conducting business abroad, including fluctuations in foreign currency exchange rates, changes in regulatory requirements,
and changes or uncertainties in the economic, social and political conditions in the Company’s geographic areas, among
other things.
We May Not Be Able to Adequately Protect Our Intellectual Property Rights
We rely on a combination of trademark, trade secret and copyright law and internal procedures and nondisclosure
agreements to protect our intellectual property. There can be no assurance that our intellectual property rights can be
successfully asserted in the future or will not be invalidated, circumvented or challenged. In addition, the laws of certain
foreign countries in which our products may be produced or sold do not protect our intellectual property rights to the same
extent as the laws of the United States. Failure to protect our proprietary information could have a material adverse effect on
our business, results of operations and financial condition.
Changes in Accounting Standards Could Materially Impact Our Results
Generally accepted accounting principles and related accounting pronouncements, implementation guidelines, and
interpretations for many aspects of our business, such as accounting for insurance and self-insurance, inventories, goodwill
and intangible assets, derivatives, store closures, leases, income taxes and share-based payments, are highly complex and
involve subjective judgments. Changes in these rules or their interpretation could significantly change or add significant
volatility to our reported earnings without a comparable underlying change in cash flow from operations.
Effective Tax Rate Changes and Results of Examinations by Taxing Authorities Could Materially Impact Our Results
Our future effective tax rates could be adversely affected by the earnings mix being lower than historical results in states or
countries where we have lower statutory rates and higher than historical results in states or countries where we have higher
statutory rates, by changes in the valuation of our deferred tax assets and liabilities, or by changes in tax laws or
interpretations thereof. In addition, we are subject to periodic audits and examinations by the Internal Revenue Service
(“IRS”) and other state and local taxing authorities. Our results could be materially impacted by the determinations and
expenses related to these and other proceedings by the IRS and other state and local taxing authorities.