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The New Mexico Business Weekly has an interesting story about Sunflower Farmers Markets, which is making a major investment in the state – building four new stores, doubling its presence, and investing $10 million there.

One of the keys to Sunflower’s success, even in a tough economy, has been that it emphasizes sharp pricing on organic foods, taking advantage of the fact that Whole Foods is largely perceived as being high-priced. However, even Sunflower has been affected by the recession; according to the story, Sunflower “hoped to open 15 new stores this year, but could only get financing for eight.”

Mike Gilliland, Sunflower’s CEO and a co-founder of Wild Oats, tells the paper, “When we ran Wild Oats and went toe-to-toe with Whole Foods, we tried to stay as far away from them as possible. Now I don’t mind being across the street. We are catering to a different customer who doesn’t shop at Whole Foods.” The Sunflower Farmers Market mantra, according to the New Mexico Business Weekly, “has been to undercut Whole Foods’ pricing by at least 20 percent, and it does a monthly basket survey of 200 items to compare pricing.”

KC's View:
One gets the sense that the folks at Sunflower put a premium on the ability to be nimble…which gives them a real advantage in any pitched battle.

Another advantage – its segment of the industry continues to grow (see the news about organic growth below).