Wild Oats Markets won its share of fans, but the chain could never quite match its stylish and better-heeled competitor in the natural-foods market – Whole Foods.
On Wednesday, the chains announced that Whole Foods Market would buy Wild Oats for about $700 million in cash and assumption of debt.
Wild Oats was one of many natural-foods companies spawned in the 1970s and 1980s in Boulder’s health-conscious, New Age milieu. The funky organic grocer acquired its largest local competitor, Alfalfa’s Markets, in 1996 but struggled to gain traction in an increasingly corporate market niche.
Austin, Texas-based Whole Foods, founded in 1980, thrived amid growing demand for the natural-food and organic products both chains specialize in.
“In spite of good stores in Colorado and elsewhere, Wild Oats is a weak performer that has focused more on cutting cost than investing in the business,” said Burt P. Flickinger III, managing director of Strategic Resource Group in New York.
Whole Foods invested in its stores, creating a better shopping experience for consumers, said George Whalin, president of Retail Management Consultants in San Marcos, Calif.
“I think the Whole Foods concept is a little better. Their newer stores are really quite a wonderful shopping experience. They invested in the look, and the way they run stores, it is clear to consumers that it’s a well-run store,” he said.
At a Cherry Creek Whole Foods Market on Wednesday afternoon, the brightly lit aisles were crowded and gleaming glass cases were piled high with grilled vegetable quesadillas, large-crusted pizza pies and other prepared foods.
“I think they do more specialty prepared foods here,” said Kathy Brennan of Golden, who was shopping there but who also shops at Wild Oats.
Brennan said she feared the sale would result in higher prices.
Wild Oats is generally cheaper, she added: “This is definitely fancier. I would hate to see prices go up. Some of us still cook.”
Gay Curtiss Lusher, 54, was shopping at Wild Oats on Colorado Boulevard when she heard the news.
“This is the first time I have been here in six months,” Lusher said. “I am at Whole Foods every two weeks; it is better. The Cherry Creek store is hopping. You always run into people you know there, and there are more (sales) people to ask questions of.”
But Marilyn Corporon, 75, has shopped regularly for years at the more homey Wild Oats. She has entered Whole Foods, which has seven stores in the state, only three times in the same period, she said.
Michael Harman, 47, shops at both stores. He understands the glitzy allure Whole Foods has for some shoppers but prefers Wild Oats.
“Clearly, people are hypnotized when they walk into Whole Foods. It is just buy, buy, buy,” he said.
Wild Oats’ roots run deep in Boulder. Mike Gilliland and his wife, Elizabeth Cook, Wild Oats’ founders, hatched the concept there in the mid- 1980s and opened their prototype store in south Boulder in 1988.
Eight years later, Wild Oats acquired Alfalfa’s Markets and its 11 stores. Alfalfa’s was founded in 1983 by “Hass” Hassan and Mark Retzloff. Retzloff had moved to Colorado during the 1970s with Guru Mahara Ji’s Divine Light Mission.
Alfalfa’s had 11 stores when it was sold to Wild Oats in 1996.
Assistant business editor Linda Castrone contributed to this report.
Staff writer Tom McGhee can be reached at 303-954-1671 or tmcghee@denverpost.com.
Chronology of two chains
1978: John Mackey starts Safer Way Natural Foods in Austin, Texas.
1980: Safer Way merges with Clarksville Natural Grocery and is renamed Whole Foods Market.
1987: Michael Gilliland and Elizabeth Cook buy Boulder health-food store Crystal Market from Jirka Rysavy.
1988: Gilliland and Cook open a second store in Boulder and call it Wild Oats.
1992: Whole Foods sells its first private-label Whole Foods products; chain goes public and has 12 stores.
1993: Whole Foods purchases Mrs. Gooch’s Natural Foods Markets in the Los Angeles area; Wild Oats is the third-largest natural-food-store chain in the U.S.
1996: Whole Foods purchases Fresh Fields, the second-largest natural-food chain in the U.S.; Wild Oats acquires Boulder-based Alfalfa’s Markets and goes public.
1997: Whole Foods purchases Amrion, the maker of nutritional supplements, and Allegro Coffee, both based in Boulder.
1998: Whole Foods opens its first store in the Boulder market. The two chains compete in seven states.
1999: Wild Oats acquires Wild Harvest markets in the Boston area and the Sun Harvest chain in Texas.
2000: Whole Foods merges its online operations with Amrion, its nutritional-supplement unit, to form Wholepeople.com; Wholepeople merges with Rysavy’s Broomfield-based Gaiam.
2001: Gilliland steps down as chief executive of Wild Oats and is replaced by Perry Odak, former Ben & Jerry’s CEO. Alfalfa’s Markets changes name to Wild Oats Markets.
2002: Wild Oats signs distribution contract with Tree of Life; Whole Foods opens store in Toronto.
2003: Wild Oats reorganizes top management; CFO Ed Dunlap is promoted to senior vice president of operations, and David Clark’s general-manager position is eliminated.
2004: John Shields steps down as chairman of Wild Oats and is replaced by Bob Miller; Whole Foods purchases Fresh & Wild, a U.K. organic-food retailer.
2005: Robert Dimond becomes CFO of Wild Oats; new senior vice president of operations Daniel Bolstad is fired after one month.
2006: Wild Oats chairman Robert Miller and two directors step down at the annual meeting; Gregory Mays is elected chairman and becomes interim CEO.
Sources: Hoover’s, Yahoo Finance
BARBARA HUDSON, DENVER POST RESEARCH LIBRARY
This story has been corrected in this online archive. Originally, due to a librarian’s error, the name of the company founded by John Mackey of Whole Foods Market was incorrect. The correct name was Safer Way Natural Foods.
