Retail Memo: Some Midwest USA Region Consumers Want Their Former Wild Oats Markets to Get More of A 'Whole Foods-Style Treatment'

As our readers know, we've been covering, writing about and analyzing the Whole Foods Market, Inc. acquisition of its once rival Wild Oats Markets, Inc. since the buyout first occurred late last Summer. (2007). [You can read a selection of some of those pieces here. Also, type Whole Foods in the search box at the top of the blog.]

Shortly after Whole Foods announced its intention to acquire Wild Oats--with Wild Oats Markets, Inc.'s blessing (both calling it a merger in fact)--the U.S. Federal Trade Commission (FTC) announced it would oppose the acquisition/merger on the grounds it was anti competitive and would give Whole Foods a monopoly in the supernatural grocery retailing category, allowing the Austin, Texas-based chain to raise prices to consumers at will.

The U.S. Federal Court in Washington, D.C. denied the FTC claim, ruling the merger would neither result in category monopolization or anti-competitiveness primarily because it viewed Whole Foods Market, Inc.'s primary competitors as being higher-end supermarket chains like Safeway Stores, Inc.'s Lifestyle format, Wegmans, Publix, H.E. Butt, Fresh Market and many others with thousands of stores throughout the U.S. in regions where there are both Whole Foods and Wild Oats' banner stores. (This is an argument Whole Foods lawyers made in court, by the way.)

However, the FTC appealed the decision in the late fall, putting a hold on Whole Foods' ability to start integrating the Wild Oats stores into the Whole Foods Market, Inc. operations and retailing system.

Once again, towards the end of 2007, the Federal Appeals Court in Washington, D.C. denied the FTC's anti-competitive and monopolistic claims, upholding the previous U.S. Federal Court's ruling in favor of Whole Foods.

Since the appeal ruling in Whole Foods Market, Inc.'s favor came down at the end of last year, the supernatural grocery chain was only able to really start integrating and re-branding (from the Wild Oats to the Whole Foods banner) the former Wild Oats stores beginning in January of this year.

It's been a big job; some say even bigger than Whole Foods anticipated. The integration process also has been compounded by the fact the FTC filed a second appeal in U.S. Federal Court in late January, attempting to halt the integration process despite the fact Whole Foods was well into the process, having been given the green light by the U.S. Federal Appeals Court.

In fact, when it filed its now third lawsuit regarding the merger and second appeal in less than nine months, the FTC asked the U.S. Federal Court for an immediate halt of the Whole Foods-Wild Oats integration until the court agreed to hear the FTC brief. The court denied the FTC's request. Further, it hasn't heard the second appeal yet, nor set a date for a hearing thus far.

The filing of the FTC's second appeal didn't stop Whole Foods from continuing the Wild Oats store integration process it began in earnest in January. In fact, the chain reports its making progress in its efforts to eventually re-brand all of the the Wild Oats stores (except two or three in Boulder, Colorado, which will carry the Alfalfa's and another local banner) to the Whole Foods banner.

There is some trouble in paradise however. We've heard comments of disappointment from a few readers about the treatment some of the former Wild Oats stores are getting. It seems many shoppers, and perhaps rightly so, expect that when Whole Foods comes in and converts a former Wild Oats grocery market, which have generally always been much more "bare bones" than a typical Whole Foods superstore, that the supernatural grocer is going to give that store the "Whole Foods treatment."

What's the "Whole Foods treatment?" That would include adding a wider-variety of natural and organic grocery products, more specialty and gourmet fresh foods and grocery products, additional premium food items which Whole Foods is famous for, and a general up-scaling of the store's product selection.

We've talked to consumers in some areas of the U.S. where Whole Foods Market has made these additions to Wild Oats stores it's already converted. However, people in other parts of the country say it isn't, or hasn't yet happened. One region where we've particularly heard this complaint is in the Midwestern U.S.--specifically in the Chicago, Illinois Metro region--and now in Indiana.

Indianapolis, Indiana is the home of the food blogger Braingirl, who writes a popular food and drink blog called: "Feed Me/Drink Me: Indianapolis food, wine and commentary." Food blogger Braingirl is an advocate and promoter of quality food and drink in Indianapolis and the surrounding region, including writing about food and grocery stores, restaurants and much more.

Indy-based gourmet Braingirl shopped at the Wild Oats market in Indianapolis before the chain was acquired last year by Whole Foods Market, Inc., despite the fact she says it offered a rather poor selection of specialty foods and specialty ingredient items. Therefore, she was rather pleased when she heard the natural foods' grocery chain would be converting the store from a "Wild Oats" into a "Whole Foods" store.

However, in a piece in her blog today, she reports the "assimilation" of the former Wild Oats market is near-complete--and the store essentially hasn't up-scaled and added specialty, gourmet and premium items, which the chain is famous for, as of yet.

As you can imagine, food blogger Braingirl isn't pleased at this development. Read her essay in today's edition of Feed Me/Drink Me to get her report on what's happening at the former Wild Oats' store, what she is being told about the conversion and integration process regarding that store, and how she feels about the natural foods' market's not getting the "Whole Foods treatment" as it relates to enhanced specialty product selection.

Since we've heard comments from more than one other person about their hoping that a former Wild Oats store in their area would become more like a Whole Foods store in terms of expanded specialty and premium product selections once that store was converted to the Whole Foods system and banner, we think Whole Foods Market, Inc. executives might want to listen to what Braingirl has to say.

Perhaps there are near-future plans to make the former Wild Oats grocery markets like the one in Indianapolis described by food blogger Braingirl more specialty and premium product-inclusive like existing Whole Foods banner stores. (If so, somebody might want to shoot her an email to that effect.) If such current plans don't exist, it's something the grocer should consider, as it appears there's added sales potential for such former Wild Oats stores in Whole Foods' doing so.