Monday, August 27, 2007

Breaking News You Can Use

Monday, August 27, 2007

Last week Natural~Specialty Foods Memo (NSFM) wrote a piece about the Wall Street Journal first reporting that Wal-Mart was developing two small footprint store formats--one an upscale, convenience-style market and the other a similar-sized health & wellness format store. NSFM confirmed the Journal's report with San Francisco Bay Area trade sources who said they had heard about the team of Wal-Mart executives in the Bay Area working on the concept. Wal-Mart however wasn't confirming or talking about the development last week when we wrote our piece.

Today however Wal-Mart announced the mega-retailer is working on the two such formats, confiming the Journal and NSFM stories. Wal-Mart isn't saying much about the new format development at present. But perhaps there isn't much to say yet as it's very early in the development process. The Associated Press has the story today here:

Whole Foods Markets, Inc./Wild Oats Deal News
Just in @ 5PM PT:
Whole Foods Market, Inc. announced it has support from enough shareholders of Wild Oats Markets, Inc. to complete its purchase of its rival supernatural grocery chain. You can read the just released Associated Press story here:

NSFM Analysis:

Today's development puts an end to the Wild Oats acquisition/merger which was opposed by the Federal Trade Commission (FTC). It's time for Whole Foods to now began the process of consolidating the Wild Oats stores into the Whole Foods corporate and retail system.

Whole Foods has already sold in principal 35 Wild Oats' stores under the Henry's Farmers Market and Sun Harvest banners. The stores are being sold to a subsidiary of Southern California-based Smart and Final, Inc. Whole Foods also plans to sell or close some Wild Oats and Capers Community Markets banner stores which are either located to close to current Whole Foods banner stores or to small for the grocer to be able to express its merchandising philosophy in. Some say this could be as many as 30 additional stores. If so that would leave Whole Foods with only 45 Wild Oats banner stores to change to the Whole Foods banner and bring into their retail system.

This should be a relatively easy--although slightly time-consuming--process for Whole Foods, even if there are more like 65 stores versus 45. NSFM expects the supernatural retailer to do this rapidly so that they can gain the optimum sales and margin advantages from changing to the whole Foods banner as soon as possible.

NSFM will be watching the merger integration by Whole Foods closely for the next few weeks. It should be an interesting and instructive process. One which we think our readers have great interest in, as does the food industry in general.

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