BAD NEWS FOR WHOLE FOODS: WALMART AND TARGET GOING ORGANIC

The category killer is at it again! That is the affectionate moniker that retail real estate brokers have bestowed on Walmart long ago. It comes from the fact that whenever they open a store somewhere they put entire industries out of business there, effectively eliminating that category from the retail landscape. You can see who their next target is: the lucrative and rapidly growing organic food market and the retailers who have been dominating that industry. That means Whole Foods, Sprouts, etc. better tighten their belts and quickly if they want to survive this invasion to their organic turf. They have always positioned the organic market and products to be sold at premium prices, so that were only affordable to affluent customers. The good news is that consumers will be the big winners here. The increased competition will lower prices quickly, and will also speed up the production of organic materials to meet the growing demand. The lower and middle classes will now be able to afford to buy these things at their favorite big box grocer, widening the appeal and market for organic products. Walmart will sell their organic products under the Wild Oats label. Organic products will be sold at the same prices as non-organic products. Due to supplier concerns, Walmart is going to roll out the organic goods in the coming months to half of their stores (2,000), and then the rest at a later date. Target also announced plans to enter into the organic market but there is nothing in the article at all regarding their plans or the timing. This could be another huge blow to the already damaged retailer, putting them at a further disadvantage to Walmart. The only problem with this added organic competition is that it is straining the resources, so prices rise because there is not enough product.  Ultimately this increased competition is expected to bring prices down once everything settles down. Having more organic food out there and available to all people is a very good thing, and it really does taste better. Case in point, I got some organic bananas at Costco (my favorite place and just about the only place I like to shop) last weekend. The prices were less than a dollar difference from the non-organic bananas. I think it was $1.03 as compared to $1.79 per pound but I could be wrong. Anyway, riding on the recent success of Rosenfeld Realty Advisors, I decided to go for the organic bananas. I can honestly say that they were some of the best I have ever eaten and my 4 year old agreed. I will be looking for them going forward for sure. As always, thanks for reading and have a great day.