retail news in context, analysis with attitude

The Dallas Morning News reports that Wild Oats founder Mike Gilliland is opening his newest organic food store in East Dallas in a former Carnival store location, positioning it as a low-price operator that undercuts Whole Foods in the segment. The story notes that Gilliland “looks for real estate bargains and uses refurbished equipment, cases and fixtures whenever possible. Like Whole Foods, its cash registers use double sided receipts to reduce paper waste 40 percent.” The stores are uniform in nature, about 28,000 square feet, with about one-third of the footage devoted to produce, and features the slogan, “Serious food at silly prices.”

The store is called Newflower Market, and is Gilliland’s third in Texas; according to the story, the chain is called Sunflower in other markets where it operates. “It goes by the different name because the Sunflower brand, owned by Minnesota-based Supervalu Inc., would have been too expensive to acquire for use in Texas,” the Morning News writes. Gilliland is allowed to use the name in five states: Colorado, Arizona, New Mexico, Nevada and Utah.

Gilliland tells the Morning News, by the way, that the recession is forcing him to scale back his 2009 expansion plans to eight stores instead of the originally planned 12; three or four more Texas stores are expected to be opened in 2010, probably in Austin and/or Dallas.

KC's View:
I saw a number the other day – and I wish I could remember where I saw it – that suggested organic sales are not as down as might be expected during a recession…which suggests that core advocates have not lost their enthusiasm for the category. If this is true, Sunflower/Newflower may have precisely the right positioning.