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article imageWal-Mart launches price-slashing organic foods

By AFP     Apr 10, 2014 in Business

Wal-Mart announced Thursday a deal with organic foods pioneer Wild Oats to sell discounted organic products in its US stores, a move expected to shake up the booming sector.

"We know our customers are interested in purchasing organic products and, traditionally, those customers have had to pay more," Jack Sinclair, executive vice president of grocery at Walmart US, said in a statement.

"We are changing that and creating a new price position for organic groceries that increases access. This is part of our ongoing effort to use our scale to deliver quality, affordable groceries to our customers."

Wal-Mart, known by its brand Walmart, said its internal research found that 91 percent of its shoppers would consider purchasing products from an "affordable" organic brand at the retailer.

The company sells groceries at more than 4,000 discount stores across the United States.

Wal-Mart said it is teaming up with Wild Oats, the trailblazing firm that launched its brand in 1987, to give customers a lower-cost organic option.

"Wild Oats will relaunch at Walmart starting this month with a new, more affordable price point on quality products covering a broad variety of categories -- from salsa and pasta sauce to quinoa and chicken broth.

"Customers will save 25 percent or more when comparing Wild Oats to national brand organic products," the Bentonville, Arkansas-based company said.

For instance, Wal-Mart said a six-ounce (18-centiliter) can of Wild Oats Marketplace Organic tomato paste will cost 58 cents, instead of 98 cents for a comparable organic product. Thirty-two ounces (95 centiliters) of chicken broth will be priced at $1.98, compared with $3.47 for its rival.

Wal-Mart did not disclose the financial terms of the deal. Wild Oats's organic products are certified organic by the US Department of Agriculture.

The world's largest retailer and the biggest US grocer would capitalize on the growing organic foods trend in the United States that has seen mainstream supermarket chains such as Albertson's and Safeway stocking organic products and specialty grocers like Whole Foods Market and Trader Joe's benefiting from their focus on healthy foods.

Wal-Mart's disruptive move into organic foods comes as the company faces falling same-store sales in the US, its biggest market.

Douglas McIntyre, an analyst at 24/7 Wall St., said Wal-Mart needs to find more lines of products to appeal to its traditional base of price-conscious lower- and middle-class shoppers.

"The deal with Wild Oats deal is a step in that direction," he said.

Shares in Dow member Wal-Mart were down 0.4 percent at $77.64 in midday trade in New York.

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