November 12, 2003

Grocer Updates Layout

New Wild Oats gets updated look
New shopper-friendly store will open today

Jeffco's new Wild Oats gets updated look
New shopper-friendly store will open today

By Janet Forgrieve, Rocky Mountain News
November 12, 2003

Walls the color of pesticide-free mangoes and organic carrots glow warmly.

Signs display not only the product information but also definitions of terms, including natural and organic.

It's got enough of the old to be familiar to Wild Oats shoppers, but the new prototype store in Jefferson County is the first in Colorado to boast the company's updated, more shopper-friendly look.

The natural foods grocery store, at 8194 S. Kipling Parkway, opens at 9 a.m. today.

Regular Wild Oats customers will notice differences the minute they walk in the door. Health, fitness and beauty products have been moved from a display at the front of the store to a separate area on the side, which the company calls a "store within a store."

The result looks more like a traditional supermarket than a typical Wild Oats, with food items displayed prominently in wider aisles.

The layout gives the store a less- cluttered feel and makes shopping more intuitive, said spokeswoman Sonja Tuitele.

At 27,500 square feet, the Jefferson County store is about 6,500 square feet larger than older stores. Wild Oats has used the extra room to expand produce and bulk food offerings and separate the meat and seafood departments.

Wild Oats opened its first store using the new prototype in April 2002 in Long Beach, Calif., and has since added one in Maine and three in Kentucky. The company, which operates 102 locations nationally, expects 60 percent of its stores to be either new or remodeled in the new prototype style by the end of next year, Tuitele said.

One grocery analyst said he expects the new format to drive sales growth but cautions that the prototype is new and needs to prove itself.

"Future results hinge on the successful rollout of two new, relatively unproven formats and remodeling older stores to resemble the new format," said a Nov. 5 report by Scott Van Winkle of Boston-based Adams, Harkness & Hill.

Wild Oats, though, said the new stores are proving themselves pretty quickly.

"Sales (in new stores) are 20 percent to 50 percent better than in the older stores," Tuitele said.

In its most recent earnings report, Wild Oats reported a 4 percent sales increase but a net loss of 3 cents per share for the quarter ended Sept. 27, compared with earnings of 8 cents per share during the same period last year.

The company attributed some of the net losses to charges for restructuring and closing and to relocating warehouse and distribution facilities but said the primary cause was problems with its main vendor, Tree of Life Inc.

Wild Oats said it has terminated its contract with that vendor and is in the process of switching to United Natural Foods Inc.

It also said that it expects ongoing grocery strikes at Vons, Ralphs and Albertsons in California to boost sales during the current quarter. Wild Oats has 21 stores in Southern California, and all have seen double- digit sales increases since the workers went on strike about a month ago, Tuitele said.

One thing the new prototype doesn't do is give Wild Oats a big edge against its largest competitor, Austin, Texas-based Whole Foods Market Inc., Van Winkle said.

Whole Foods, whose typical store is about 45,000 square feet, can offer a wider range of products, he said.

Wild Oats' smaller size, however, makes it less expensive to build and stock stores. That means Wild Oats has the advantage of going into markets that Whole Foods can't, he said.

"It's not that Cherry Creek Whole Foods store," Van Winkle said of Wild Oats' updated look. "But it's leaps and bounds ahead of the old Wild Oats and Alfalfa's stores."

Wild Oats expects to open 15 stores next year and 20 in 2005.

In January, it will open its second in the state, in Colorado Springs. Later in 2004, the company will launch its flagship store in Superior. At 32,000 square feet, the store will offer a sit-down sushi bar and a community meeting room.

Early bird bonus

The first 250 shoppers through the doors of the new Wild Oats store when it opens at 9 a.m. today will receive a canvas bag filled with natural and organic groceries valued at $50 to $55. The firm cautions that customers typically begin lining up about 7 a.m. and said it will provide breakfast and coffee to those in line.

Posted by Craig at November 12, 2003 08:37 PM