Blog: Dean BestWhole Foods just as hard-nosed as the rest

Dean Best | 28 August 2007

While Whole Foods is busy gobbling up shares in rival US retailer Wild Oats, interest in what has proved a captivating takeover battle will turn to the changing landscape of natural and organic retailing in the country.

Whole Foods succeeded in convincing the US courts that its acquisition of Wild Oats wouldn’t hurt competition in the sector. The company stressed that as organic and natural foods have become more popular, major retailers, such as Wal-Mart, Safeway and Kroger, have expanded their own ranges.

Looking at store numbers, Whole Foods has a strong argument – the firm currently has 197 stores, and Wild Oats has 109. Wal-Mart, by comparison, has 1,900 superstores alone.

However, to characterise Whole Foods as a brave independent doing battle with the mighty grocery chains would be wrong. Whole Foods could just as easily be cast in the role of hard-nosed market leader that targeted its most dangerous competitor and moved in for the kill.

During the legal battle with the Federal Trade Commission, it emerged that Whole Foods plans to shut some 30 Wild Oats stores immediately after the deal closes, and also forecasts that revenues at Whole Foods outlets near to where Wild Oats had been trading would almost double.

There have also been suggestions that Whole Foods had put pressure on suppliers who were also dealing with Wal-Mart.

Whole Foods might be smaller than some of the big food retail giants. But, any notion that it is somehow more "cuddly" - possibly stemming from the healthy and environmentally-friendly nature of its products - should be treated with caution.


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