Product Overview

Whole Foods and Wild Oats were both natural- and organic-food stores that competed for similar customers on values such as high-quality and healthy products, excellent customer service, knowledge of products, and an enjoyable shopping experience. In February 2007, Whole Foods announced that it would purchase a smaller but formidable competitor, Wild Oats. There was tremendous geographic complementarity involved: The merger would give Whole Foods the largest footprint within the natural- and organic-grocery industry in North America.

Learning Objectives

The case sets up a discussion of the strategic implications that result from a merger between a large company and a close competitor within an industry that is consolidating into a larger one?with much larger competitors. The completion of the Whole Foods and Wild Oats merger dramatically changed the environment in which Whole Foods competed. Its strategic and tactical decisions now would focus on competition with stores such as Kroger, Albertsons, Wal-Mart, and Target. Thus, there are both intended and unintended consequences to the merger, which needed to be accounted for in the postmerger-integration process.