Whole Foods Buys Wild Oats — Part Two

Okay it took us a while to get back to you with our opinion on the big sale.  And while we still have out doubts about the impact the purchase will have on operations in the short term, financially the move is strong.

In case you’re thinking NBN was just brainwashed by the financial experts we talked to, nearly all of whom were cheering from the sidelines, like Mackey and company just ran for a 97 yard touchdown, hold y’er horses.

After all, Whole Foods has been losing its magic and mojo in bits and pieces. Suzy New-Mom has been buying her organic milk elsewhere these days–Safeway, Kroger, and of course Wal-Mart and Target too.  And more and more, these transitional natural shopping dollars haven’t been headed for Whole Foods coffers.  Perhaps more importantly, these shoppers haven’t been discovering Whole Foods either and expanding their natural and organic purchases, the way the might if they entered MackeyLand.

So while we aren’t so sure that if a conventional chain had purchased Oats, this pattern would have gotten more dramatic, we do know the obvious: that the entry point to natural and organic consumption is everywhere these days and that by purchasing Oats, Whole Foods has kept the competition from getting stronger.

Now here’s what we don’t like.  As written here before, Whole Foods isn’t losing its magic just over new competition.  MackeyLand is losing its lustre due to another fact, one that mimics the conventional chains so well.  The constant number crunching that removes the best quality products from the shelves, focuses on competing with conventional and mass market stores and forgot that the whole revolution WFM started was about something more exciting than price.

Adding 110 new stores (minus 40 to 60 cast-offs) to this formula along with all the challenges accompanying this means that the crunching will get louder and that creativity and imagination are going to suffer.

Stay tuned.  While we lost our industry’s most entertaining battle royale we may have something more exciting to watch. As more conventional stores create natural formats (Supervalu’s Sunflower, Publix Greenwise) the real battle might be just beginning.

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