Saturday, May 19, 2018
Business

Walmart goes crunchy with low-priced organic foods

Low prices and organic food.

They usually don't go together, but Walmart wants to change that.

The giant retailer, in a move to grab even more grocery dollars, announced Thursday it will carry Wild Oats organic products at half of its stores nationwide. That includes nine supercenters in the Tampa Bay area.

"We don't think our customers should have to pay high prices to put food on their family's table and organic products shouldn't be an exception," said Danit Marquardt, a spokeswoman for Walmart, based in Bentonville, Ark.

Walmart will introduce about 100 Wild Oats items, most of them pantry products ranging from olive oil to chicken broth. The chain will offer them at 2,000 stores initially, then expand to all 4,000 locations.

Walmart says the products will save shoppers 25 percent or more when compared with national brand organic items. A 6-ounce jar of Wild Oats tomato paste, for example, will sell for 58 cents, versus 98 cents for a national brand. Cinnamon applesauce cups will sell for $1.98 versus $2.78 elsewhere.

Walmart already carries 1,600 organic products but not at the lower price point.

Products will be distributed to stores over the next few months and interspersed throughout the store by category, rather than lumped together in one area.

Walmart's decision was backed by internal company research that found 91 percent of customers said they would consider buying "affordable" organic products at the store. The nation's largest grocer used its massive buying power to drive down the prices.

"We know our customers are interested in purchasing organic products and traditionally they had to pay more," Marquardt said. "We're changing that."

Walmart partnered with Wild Oats, which operated 110 stores, including one in Tampa, before being bought out by rival Whole Foods in 2007. The Wild Oats brand disappeared until recently when Fresh & Easy stores in California started carrying the products. Private equity firm Yucaipa Cos., run by billionaire Ron Burkle, now owns the Wild Oats brand and Fresh & Easy.

"In the past, organic goods were viewed as premium items," said Frank Quintero, a spokesman at Yucaipa. "This is going to make organic food available to more people."

U.S. sales of organic food and other products reached $29 billion in 2012, the most recent data available, according to the Organic Trade Association. Ten years earlier, sales were $8 billion.

Industry experts say Walmart's move could prompt other retailers to cut prices on organic goods to stay competitive.

"Logic tells you that if Walmart does this and they are successful, then everyone will follow," said Bob Messenger, editor of the online newsletter for the food and beverage industry The Morning Cup. "At the very least it's going to scare the crap out of Whole Foods and others."

Faced with more competition in the natural and organic arena, Whole Foods already is focused on price competition. In the past six months it has expanded value offerings and increased promotions. The meat department offers fresh packaged chicken under the 365 Everyday Value brand. In the produce section, the chain is adding more ''high-grade" but affordable options alongside its organic products.

On Tuesday, Target, one of Walmart's main competitors, said it would expand its selection of organic products. The Made to Matter — Handpicked by Target collection will have more than 120 products from leading natural, organic and sustainable brands.

Susan Thurston can be reached at [email protected] or (813) 225-3110.

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