I agree. When the next contract comes up, no doubt WFMI will try to drive a "better" deal, but how much more buying power is WFMI, well, buying with it's acquistion of OATS? On a sales basis, OATS is alot smaller than WFMI. Perhaps from UNFI's perspective, it would be better to have the two remain independent, but as many has posted before, these two are not the only players in the market and the overall market is growing. I expect UNFI to continue to grow as the market increases.
That said, the two trust officers who manage some trusts I'm familiar with sold each trust's UNFI holdings recently, prior to the latest FTC news, due to their concerns about the impact of a merged WFMI/OATS.
UNFI already signed the contract in January. That is why you saw gross margins improve at Whole Foods. Look at the last conference call, the CEO specifically mentioned it. The question is now whether Whole Foods will roll the Wild Oats stores into this contract and further contract margins for UNFI. This lower margin portion of UNFI business should continue to growth at the expense of the highest margin independent customers
Yes, if Wild Oats is apporved to merge, the 7 year contract will include OATS stores. Since WFMI is still growing at the pace of a winning race horse, it's obvious where this is going. No one seems to be factoring in all the smaller stores and businesses that are going to need UNFI. Loads of people order from them and the number is only going to increase.