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Wal-Mart vs Whole Foods: The Battle Over Organic Pricing
By Daniel Kline | April 12, 2014 |
Wal-Mart (NYSE: WMT ) has announced plans to carry the Wild Oats brand of organic groceries and promises to reduce customer cost by at least 25%.
That move directly targets Whole Foods (NASDAQ: WFM ) and The Fresh Market (NASDAQ: TFM ) , which have built their businesses around selling higher-priced organic groceries.
The Wild Oats line, which dates back to 1987, relaunches at Wal-Mart later this month with what a press release describes as "a new, more affordable price point on quality products covering a broad variety of categories – from salsa and pasta sauce to quinoa and chicken broth."
The company promised that its prices will be 25% or more lower in comparison to national brand organic products, a claim the company bases on item price comparisons (per ounce) of 26 nationally branded organic products available at Wal-Mart stores that was conducted earlier this month.
"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 Wal-Mart U.S. "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."
If Wal-Mart has anything, it's the scale required to force down prices. With over 4,000 stores in the United States and a growing line of grocery-only Neighborhood markets, the chain is an immediate player in any category it enters.
Wild Oats was once a player
Wild Oats was once a grocery chain that was the number two organic grocer in the country behind Whole Foods, which purchased its competitor in 2007. Whole Foods was later forced to sell the brand in 2009 due to antitrust

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