Supermarket Wars Part Deux

Whole Foods, confounding regulators who argued the retailer would do otherwise, announced it was lowering prices at Wild Oats stores in the Rocky Mountain region.

While this might be seen as a way to calm anxious customers (or thumb its nose at regulators), it is also informed by something else: competition. On that score, Whole Foods said it was rolling out a smaller store format, called Whole Foods Market Express at a test site in Boulder, which will focus on value-priced products and items for shoppers in a hurry.

This smaller format store (the initial one located at the original Wild Oats location in Boulder is 18,500 square feet) might eventually be used in the battle against Trader Joe's and  Britain's Tesco. The latter is opening "Fresh & Easy" markets in the United States that will be around 10,000 square feet, with ready-to-eat meals and fresh produce (among the most profitable aisles in the grocery biz). Whole Foods lately has been focusing on giant format stores of around 80,000 square feet but now it seems to be protecting the lower flank as well. So much for monopoly....

One note: In yesterday's item on Aurora Organic, I failed to mention that Wild Oats stocks private label milk from Aurora. With Whole Foods takeover, it will be interesting to see how that contract progresses. Currently, Whole Foods relies on Organic Valley for its private label organic milk and has not been exactly quiet about criticizing Aurora's practices.

(Picture link from Wikipedia)

- Samuel Fromartz