Wal-mart to Double Organic Food Sales

http://today.reuters.co.uk/news/newsArticle.aspx?type=healthNews&storyID=2006-03-07T144101Z_01_N06371542_RTRIDST_0_HEALTH-FOOD-SUMMIT-WALMART-DC.XML

Wal-Mart doubling organic food offerings

Tue Mar 7, 2006 2:40 PM GMT

CHICAGO (Reuters) - Wal-Mart Stores Inc. aims to be the mass-market provider
of organic food, and will have doubled its organic offerings over the next
couple of weeks, Wal-Mart's head of dry grocery told Reuters on Monday.

DeDe Priest, who was promoted to senior vice president of dry grocery in
December, said the retailer has no intention of becoming a health food
store, but wants to make organic food accessible to all.

"What you're going to see is over the next couple of weeks, we're going to
have doubled our SKU (stock keeping unit) count," Priest said at the Reuters
Food Summit in Chicago.

The move comes as Wal-Mart, the world's biggest retailer, is bringing in
more upscale merchandise in the hope of getting shoppers to buy more than
just the basics.

Wal-Mart is the top U.S. grocery seller and also No. 1 in organic milk
sales. It carries organic baby food, juice, produce and pasta sauce, but
will be expanding its offerings to include products ranging from pickles to
macaroni and cheese.

Priest said Wal-Mart has paid close attention to the small-but-growing
organic market for several years, and decided to make its move now as
studies show a majority of U.S. consumers buy at least some organic food.

She declined to say what percentage of Wal-Mart's food offerings would be
organic, but said the retailer wants to be the access point for organic
foods at a value, and "knock out the myth that it's just for the rich."

Priest met with CEOs from 15 of the top consumer products companies in her
first week on the job to stress the importance of organics and press them to
expand their offerings.

For food manufacturers, getting into a new category such as organics can be
risky without a retailer committed to selling those products, so Wal-Mart's
push into organics will likely drive more production.

Organics remain a small part of the U.S. food industry, but they present a
key growth opportunity for Wal-Mart as the retailer looks for ways to get
customers to buy more.

Wal-Mart already draws some 100 million U.S. customers to its stores each
week, so the focus has been on convincing existing customers who may shop
Wal-Mart for food to buy designer clothing or flat-panel televisions as
well.

Priest declined to comment on pricing strategies, but said the retailer
would not be making "extra money" on organics.

"Our focus is never really to grow our margin, it's to grow our absolute
sales," Priest said.