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The Dallas Morning News reports that the new Wal-Mart store that opened in Plano, Texas – featuring a more upscale product selection, including a broad-for-Wal-Mart assortment of natural and organic foods – seems to be having a minimal impact on a Whole Foods store two miles away.

Walter Robb, co-president/COO at Whole Foods, says that at least part of the reason Wal-Mart’s impact has been blunted is because his store has been price-competitive.

The battle between the two retailers in Plano is expected to play out in numerous other markets. Wal-Mart has made organics a major initiative, pledging to double its selection and to make the prices accessible to a wide range of consumers. Whole Foods, on the other hand, brings enormous equity to the category, having generated greater sales increases over the past few years than most other food chains.

In a separate story, the Morning News reports that another big question raised by Wal-Mart’s organic intentions is whether it can foster even greater consumer acceptance of the category than has taken place to date. And if it does, that creates yet another issue – whether the demands traditionally placed on suppliers by Wal-Mart will result in weakened organic standards that could hurt the entire segment.

That won’t happen, Wal-Mart spokeswoman Gail Lavielle tells the Morning News. "It's very important to us to work with suppliers who follow the rules. Cheating by anyone isn't in our interest. The trust factor is really a big one with our customers."

At the same time, there are other new players in the organic category that have to be taken into account.

Business First of Columbus reports that Supervalu wants to open as many as seven Sunflower Markets – its discount/organic format – in Central Ohio.

The first Sunflower unit opened in Indiana earlier this year, but Supervalu reportedly already has plans to open some 50 more in university towns where it believes they will be well-received...and where, in all likelihood, they will create even greater demand and even more debate about the future of the organic category.
KC's View:
We think that the demand for organic foods is going to get to the point where all the debate about big agribusiness vs. small farmers is going to become moot. You’re going to need all that production just to keep up with demand, and the focus will be on compliance with federal standards.

The sentiment from Wal-Mart is the one that makes the most sense: it simply is in everyone’s best interests not to do anything to break trust with the consumer.