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Could Tesco Pounce On Wild Oats If
FTC Blocks Whole Foods’ Purchase?

If the FTC succeeds in its effort to block Whole Foods from buying Wild Oats, what is likely to happen next to Wild Oats? We now are certain that the major shareholders would like to sell if they can get a decent deal. The sale announcement brought attention to the fact that there is real upside with Wild Oats as it generates only around half the sales per square foot that Whole Foods does.

Any major retailer could step in to get a place at the table in what the FTC is claiming is a distinct organic supermarket sector, but perhaps the most intriguing possibility would be for Tesco, whose voyage to America we’ve covered extensively here, to buy the chain.

Wild Oats is a small footprint store, larger than the typical Fresh & Easy stores but nothing Tesco isn’t used to from the U.K., and its green ethos fits right in with the image Tesco is pushing for Fresh & Easy. With Tesco’s backing, Wild Oats could open superstores in places like Austin, New York and, well, London!

At one fell swoop, Tesco could acquire some U.S. scale, operations in 24 states and one Canadian province, an operating model that doesn’t require Tesco’s investment in regional distribution centers, an organic supply chain and a brand for expansion.

Maybe the operation is too small and scattered for Tesco to bother with but, maybe, the experience actually selling to consumers in 24 states would be a big plus for Tesco as it looks to roll out across the country.

After all, setting up a store in a warehouse and calling it a movie set may be clever, but even the best movie sets have their limitations as consumer research devices.

If the FTC drags this on and if Tesco opens profitably, it may leap just to grab the real estate.

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