The merger of Boulder-based Wild Oats Markets and Whole Foods Market Inc. may result in the loss of some jobs, said Will Paradise, Whole Foods president for the Rocky Mountain region.
Paradise wouldn’t say how many jobs could be cut as a result of closing stores that have overlapping sales territories.
“There is a lot of duplication,” he said. “It is possible some might close.”
One analyst is predicting a net increase in jobs if the merger is completed.
“Neither company has a warehousing-and-transportation infrastructure yet. Because of the combination of the two companies, they will probably look sooner rather than later to create that,” said Burt P. Flickinger III, managing director of Strategic Resource Group in New York. “The standard rule of thumb is when a company’s sales reach $400 million or more, it is time to go into self-distribution.”
Wild Oats Markets has annual sales higher than that – about $1.2 billion, with 110 stores in 24 states and British Columbia.
Whole Foods had sales of $5.6 billion in fiscal 2006 and has 191 stores in the U.S., Canada and the United Kingdom.
Whole Foods will also improve Wild Oats stores and expand some, a move that will boost sales and require additional help, Flickinger said.
“They will increase sales per store by 50 to 70 percent or more,” he said. “That will actually increase the employment per store by a dozen people or more.”
Some Wild Oats headquarters jobs would probably be lost, he added, although Whole Foods would likely offer positions elsewhere in the company to those who now work at Wild Oats’ Boulder headquarters.
Paradise agreed that those who work at the headquarters and lose jobs might find other work at the combined company.
He said he doubts that the chains, both of which rely on United Natural Foods Inc. to distribute groceries to their stores, will abandon that alliance.
Whole Foods distributes its own groceries in only one of its 11 regions, he said. In the Rocky Mountain region and nine others, Whole Foods self-distributes produce, baked goods, flowers and some other goods but relies on UNFI for grocery distribution.
“We have a good partnership with UNFI,” Paradise said.
And those who believe that sales will increase enough to trigger compa nywide job growth, even as stores are closed, aren’t considering the growing competition in natural foods and other products that Whole Foods faces from Wal-Mart, Safeway and other more traditional retailers, he said.
“They are major players, and they are often overlooked,” Paradise said.
Staff writer Tom McGhee can be reached at 303-954-1671 or tmcghee@denverpost.com.
