Whole Foods Takes Aim at Newflower

Big grocery news yesterday with Whole Foods Market announcing its Austin area expansion plans. We already knew about WFM's delayed Domain store to replace their cramped Gateway location, but the new locations at Hill Country Galleria and William Cannon and MoPac will give Newflower's nearby stores some serious competition.

This is particularly true for the Hill County Galleria store, which will be right across the highway from Newflower. Although Newflower's sale prices are hard to beat, price point isn't necessarily the driving force for hill-dwelling Escalade moms.

Between Newflower, Sprouts, Natural Grocers and Sun Harvest (but still no sign of Trader Joe's), you could argue that Austin's budget natural grocer sector is starting to get overbuilt. Of all these stores, I think Newflower may be in for the toughest ride. The Colorado-based chain already had to shutter a Dallas store earlier this year.

It's worth noting that Newflower is an offshoot of Sunflower Farmer's Markets, which was started by Mike Gililland, the co-founder of Wild Oats. Whole Foods acquired Wild Oats in a contentious 2007 transaction that garnered plenty of attention from federal antitrust regulators. There is no love whatsoever between Gilliland and Whole Foods CEO John Mackey. When Whole Foods opened a store in Wild Oats' Boulder, Colo. backyard, Mackey famously sent Gilliland a copy of the board game Risk with a note reading, "forewarned is forearmed."