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Wal-mart to Double Organic Food Sales

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.