Watch Out, Whole Foods: Wal-Mart Goes Organic at a Discount
Wal-Mart (NYSE:WMT) is on the prowl, and it’s hunting organic food retailers like Whole Foods Market (NASDAQ:WFM) and Sprouts Farmers Market (NASDAQ:SFM). Wal-Mart, which is the largest grocer (as well as retailer) in the United States, is expanding its organic food selection, and it will be pricing the new goods as much as 25 percent below the price level of national-brand organic products.
“We know our customers are interested in purchasing organic products and, traditionally, those customers have had to pay more,” said Jack Sinclair, executive vice president of grocery at Walmart U.S., in a statement. “We are changing that and creating a new price position for organic groceries that increases access. This is part of our ongoing effort to use our scale to deliver quality, affordable groceries to our customers.”
In order to pull off this potentially industry-disrupting trick, Wal-Mart has partnered with Wild Oats, once the nation’s second-largest natural and organic foods chain. Wild Oats was once an operator of actual natural and organic foods stores but was purchased by none other than Whole Foods in 2007 for $565 million. However, in 2009, Whole Foods lost a protracted battle with the Federal Trade Commission, and the chain was sold. Now, it looks like Wild Oats is settling into a position as distributor to large retailers.
“By partnering with Walmart, Wild Oats is starting a movement that makes it easier than ever for customers to access affordable organic and natural products,” said Tom Casey, CEO of Wild Oats, in a statement. “Our availability at Walmart will allow us to finally pass along scalable savings directly to consumers. We are reinvigorating our brand by bringing great tasting Wild Oats products to more customers than ever before.”