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Florida Natural Foods Stores Fear Impact of New Whole Foods Supermarkets

The Bradenton Herald (Florida)
September 9, 2004

OPENING MAY HURT SMALLER RETAILERS:
WHOLE FOODS IN SARASOTA

By: DANA SANCHEZ

SARASOTA, FLORIDA:

Whole Foods Market Inc., the 800-pound granola bar of health-food stores
opening in Sarasota later this year, could impact smaller natural and
organic markets in Manatee.

Whole Foods, a Texas-based corporation with 160 stores in the United States
and United Kingdom, builds mega-stores. The Sarasota location near the Five
Points area is slated to be 35,000 square feet. It will be the seventh
Florida store, a first for the west coast, with an eighth store scheduled to
open next year in West Palm Beach.

Whole Foods has a history of locating new stores in areas with pre-existing,
independently owned health food stores and then having a negative impact on
those stores, said Ronnie Cummins, national director of the Organic
Consumers Association in Minnesota.

"We wish they would colonize new areas," Cummins said. "I think they would
benefit from being more sensitive to pre-existing businesses."

Whole Foods' bottom line speaks for its success. Publicly traded, the
company saw sales increase 23 percent to $2.9 billion by the third quarter
of fiscal 2004. With 17 stores less than two years old, the company reported
average weekly sales of $595,000.

"We are experiencing one of the best years in our company's history," said
John Mackey, chief executive officer for Whole Foods, in a third quarter
report dated July 28.

Whole Foods carries organic produce and unconventional grocery brands.

"We're a purveyor of gourmet and natural foods," said Jeff Miller, assistant
store manager at a Whole Foods Market in Winter Park.

Whole Foods' prices are competitive, said Cheryl Roth, who markets the
company from New York.

A future competitor in this area disagrees. John Lamb is general supervisor
for 11 Richard's Whole Food stores in the Tampa Bay area, with two in
Bradenton and six in Sarasota County, home to the company's headquarters.

"If you go into any of their stores and look at their prices, they're
overpriced," Lamb said.

There are also differences of opinion about Whole Foods' workplace. Fortune
Magazine named Whole Foods one of the top 100 companies to work for in 2004,
but a Web site run by employees indicates that all is not rosy.

Employees at Whole Foods are called team members, and the company's mission
is based largely around their happiness, Winter Park manager Miller said.

However, www.wholeworkersunite.org

"Many people love the community at Whole Foods," reads a posting on the
site. "But many of us have also seen that as the company has grown, the
focus has shifted to profits and expansion at the expense of worker respect
and fair compensation."

Miller insists it's a great company to work for. A cashier at Whole Foods
can expect to earn at least a dollar more per hour than at other grocery
stores, Miller said.

"Salaries are extremely competitive," he said. "We're looking for career
people, people who want to stay."

Whole Foods will also have to compete with supermarkets like Publix and
Wal-Mart, which carry their own selections of organic produce.

The local health food market is particularly competitive in the area of food
supplements. Small vitamin stores with little overhead have popped up all
over. And the market is glutted with low-carb items, which are now carried
by all major grocery stores.

Whole Foods' impact on the market has its benefits, creating a positive
shopping environment, bringing organic foods to new customers and forcing
smaller shops to do a better job, Cummins said.

"The only way to prevent these corporate giants from putting you out of
business is to cement your customer loyalty and provide better service and
products," he said.