QWhen a company's CEO takes a pay cut of nearly 100%, it tends to mean one of two things: he's either already wealthy enough or the company's about to go into liquidation. For Whole Foods Market CEO it is clearly not the latter scenario. John Mackey will be earning a peppercorn salary of $1 per year from January, because, as he says in his blog: "The tremendous success of Whole Foods Market has provided me with far more money than I ever dreamed I'd have.

"I continue to work not because of the money I can make but because of the pleasure I get from leading such a great company and the ongoing passion I have to help make the world a better place."

Mackey's brainchild, which started off as a single vegetarian store in Texas in 1980, has become one of the biggest retail success stories of recent times. Now, having retained its title as The World's Greatest Food Retailer, Mackey has a right to be magnanimous. Whole Foods Market thrashed, by a distance, all other nominees in our second annual poll to find the World's Greatest Food Retailers. Whether you consider the amazing fresh food, the fantastic merchandising or the dedication to natural goodness, Whole Foods does things better.

"It's easy to see why Whole Foods would perform in London but when you see it thriving in blue collar America it's stunning," says Jerry Marwood, MD of Spar UK and one of our Academy members. "This is the future - fresh foods with provenance sold at a price we can all afford in a way that makes you want to buy more and more. Bring it on."

Today its stores number 189, turnover is $5.6bn (£3bn) and it is praised by consumers and industry pundits alike for its ethical approach. Like-for-like sales growth is phenomenal - 11% in the 52 weeks to 24 September this year.

The financial prowess of Whole Foods is underpinned by a great in-store experience. Ever since Mackey and his three co-founders decided to put natural foods into a supermarket format, Whole Foods Market has offered something special. Fresh produce is the jewel in the crown. In season you can typically find 20 different types of apple, 15 exotic fruits including guava, cherimoya and tamarind, and a near complete alphabet of vegetables.

The range of cheese is breathtaking - each store stocks 350-800 types. Meat and poultry is another core offer, with the Whole Foods natural guarantee ensuring antibiotics, hormones and byproducts are never used while animals are reared.

Private label ranges such as Whole Catch (seafood) and Whole Fields (vegetables) allow you to pick up your goods in convenient packs. It has also turned what was a deli selling limited cold meat cuts and prepared salads into a Prepared Foods Department selling quick entrées, side dishes, soups, sushi and sandwiches for lunch time shoppers.

The transparency with which it operates is one of its biggest distinguishing characteristics. There had been a policy to cap directors' salaries at 14 times the average pay of staff. This month this was hiked to 19 times, but bear in mind that the average salary of a CEO in a Fortune 500 company in 2004 was 431 times the average pay of the staff.

Mackey put up a blog to explain: "Everyone on the leadership team (except for me) has been approached multiple times by headhunters with job offers to leave Whole Foods and go to work for our competitors. Raising the salary cap has become necessary to help ensure the retention of our key leadership."

Whole Foods also puts a benevolent approach to business at the centre of its philosophy. It runs two charitable foundations, The Whole Planet Foundation and The Animal Compassion Foundation, and a Global Team Member Emergency Fund makes $100,000 a year available to staff who get caught up in natural disasters. Little wonder Whole Foods ranked 15 in this year's Fortune 100 Best Companies to Work For.

"Profit is not the primary purpose of business," Mackey says. Whole Foods Market has a responsibility to a number of stakeholders that can be prioritised in this order: customers; team members; investors; suppliers; community; environment.

So while we wait for the opening of the first Whole Foods Market store (it already owns the Fresh & Wild chain), which will happen next year in London, we'll leave you with some words from Mackey: "The profit-centred businesses we compete against cannot beat us in the marketplace. Our customer and team member-centred business model beats them every single time. It is a more robust business model."

Location: US, nationwide

Established: 1980

No. of stores: 189

Fact: Aims to more than double sales to $12bn by 2010