The Whole Foods Big Deal

Whole Foods, one of the grocery stores we frequent, is currently in a struggle with the FTC to allow them to purchase a small competitor, Wild Oats. The court hearings which will decide the case have been going on yesterday and today, and a decision is expected by the end of the day. As both a customer and a stockholder, I’m very interested to see what the decision will be. To me, it seems almost incredulous that the government is arguing that WF will not have competition if the purchase is allowed to go through, even though every grocery store I’ve been to in the last year or so has organic offerings. On the other hand, WF does sell a lot of unique products that are not found at many other stores, so from that perspective I can see how competition might possibly be reduced if they purchase another store that also (from what I hear) carries many unique products.

Basically, the FTC is protecting the health-food crowd by attempting to ensure that all the alternative ingredients that we already pay way too much for don’t get sold only at WF. For that, I can thank them. However, I think in general they are taking this way out of proportion, because even if WF was allowed to purchase Wild Oats, there are still many, many other stores that compete with WF; some on quality, some on uniqueness, and almost all on price. It will be interesting to see how this court decision ends up, and how it affects the “healthy” grocery store markets.

Interesting blog posts from WF’s CEO, John Mackey, here.

News article describing both sides of the argument here.