Whole Foods Set To Buy Wild Oats.

It was announced yesterday that Whole Foods has entered into an agreement to buy their largest like minded competitor Wild Oats, for $545,000,000.

This will be interesting to watch. One thing that Whole Foods has shown is that they know how to assimilate acquisitions and make them better. A feat SafeWay, AHOLD, and Albertsons, never figured out. I don't know why this is, perhaps it is because culturally, natural food stores are similar in their retailing view, regardless of where they are located.

In most acquisitions, the driving force that defines the culture of a company is lost in the company that is acquired. Acquisitions of this sort usually result in new policies, new procedures, new demands, and synergies galore that are touted to cut costs and make the new organization leaner and meaner. Usually that means cutting labor, raising prices, and then forming task forces of all types to try and figure out what the heck happened to the business.

Just my opinion, but Whole Foods operates among the best merchandised food stores around with a consistently high level of execution. I don't see them trying to operated a service oriented store on a 9% wage or mandate that their produce department manage a super high rise wall rack, and hand stack the entire department on a $180.00 SPLH. These people seem to get it. They know that they must invest in the people and the process. For this reason, I believe that Whole Foods will make this acquisition a success.

I have to believe that any MERCHANT that has ever worked in a retail environment believes in their very core that when given the resources, a store can increase sales and margin. Combine those resources with a superior go to market strategy and you have the recipe for success. In essence you have Whole Foods.