Wednesday, June 20, 2007
Seen and Heard Around Boulder, Wild Oats/Whole Foods Merger
Boulder is the health food, granola center of the world, if not the entire known and unknown universe. Above is the original store, the old Alfalfa's Grocery, that ultimately became the mother lode of Wild Oats Market food chain at the corner of Arapahoe and Broadway in downtown Boulder.
For decades, you could dash in to the lavish salad bar for lunch and after sitting down to eat overhear a conversation at the next table of, say, a Ward Churchill pontificating on the evils of capitalism and democracy. Ironic since affluent, relative reality Boulder is the crown jewel of the materialism in America today. Not to mention Bill O'Reilly's number one pick for the most liberal progressive city, and it's not a compliment either.
Alas, Wild Oats Market may be the product of its own success and soon gobbled up by the new 1000 pound gorilla on the block, Whole Foods Market.
Or is it?
In unsealed documents at the Federal Trade Commission hearing Tuesday on the Whole Foods/Wild Oats buyout, a lawsuit by the FTC seeking to block the merger alleges that such a move will eliminate competition and create a monopoly for the Whole Foods giant.
Whole Foods CEO John Mackey of Austin, Texas is quoted as telling his board that buying Wild Oats would allow their company's chain to avoid "nasty price wars" and "eliminate forever" the threat of say a Kroger or Safeway buying Wild Oats and becoming a chief competitor of Whole Foods.
Mackey has responded in an extensive blog post that his comments were taken out of context and contends that he doesn't consider WOM his company's chief rival in most metropolitan markets. Mackey further argues the merger would cause prices to go down and quality to go up.
Okay, okay, okay, like what else would you expect Mackey to say? He's a smooth operator. (He's also a good business man who's come up with one of the best corporate health savings plans for employees anywhere.)
A full hearing is set for July 31-August 1 in Washington, D.C.
My prediction is that Mackey will prevail, and Whole Foods will take over the smaller Wild Oats chain for better or worse for the consumer. The Whole Foods gorilla will become to organic foods what Toyota is to cars.
I personally prefer the size, scale and pricing of Wild Oats to that of Whole Foods, but I think I'm in the minority. I think Whole Foods over-seasons and put too much stuff on its prepared foods---too much balsamic, hot peppers and tamari for my liking.
So stay tuned and keep eating salads and lots of organics. Whole Foods isn't nicknamed "whole paycheck" for nothing.