September 3, 2008

Oklahoma Health Food Stores Report Slowing Growth Amid a Sluggish Economy

By Heather Caliendo

Just as pop culture caught onto the green and health-conscious movement, the nation's economy took a beating.

Health food stores offer organic and natural foods, which traditionally come at a higher price. Even with people paying closer attention to their pocketbook, several Oklahoma health food stores said they have not seen dramatic decreases in business.

Jeff Emerson, co-owner of Natural Farms Market in Tulsa, has been in the natural food business about eight years and has two stores in Tulsa. He said his stores charge about 10 to 15 percent higher than the average supermarket.

For the first six years, the stores saw about a 55-percent increase in sales. Over the past two years the stores' sales grew 20 percent.

Emerson said their loyal customer base keeps coming back, but the rising cost of food and gas has affected the overall business.

"We're pretty lucky with our customer base, but we have watched our south Tulsa sales drop somewhat at the store," he said.

He said the sluggish economy has put a stop to possible expansion plans for the business.

"We kind of reined that in until we find out what the economy is going to do, it's kind of scary," he said. "There was a group in Kansas City courting us and we almost moved there, but then the economy tanked."

Still, while his stores have taken somewhat of a hit, Emerson said he doesn't see the economy having a permanent effect on business.

"People are realizing when you buy local it is a little bit better taken care of," he said.

Mary Anne O'Dell, nutritionist with Akin's Natural Foods Market, said the store has not been hurt by rising food prices. She said the store has maintained its customer base and has seen an increase in new customers. She said because the store requires its employees to undergo mandatory health education training, it enables the store to offer services not found in other supermarkets.

Historically, organic prices were significantly higher than traditional food items, but in the last 10 years prices have become comparable, she said. Chain supermarkets such as Wal-Mart and Homeland recently jumped on the green movement and began to offer organic food items as well.

"Our organic products versus the grocery stores are very comparable in price," she said. "I think demand has allowed the items to be more available and widely distributed."

Tracy Taylor, senior vice president of public affairs for the Natural Products Association, said the natural food product industry has grown for several years. She said retailers are not reporting a drop in customers because of higher fuel and food prices. Some areas such as personal care have reported an increase.

"People are very conscious and interested about health and have always been willing to purchase products even if they had been more expensive than conventional products," she said. "If you look at the data even with this economy, which has been affected for a while, we are not seeing that folks are turning away from natural, organic products."

Austin-based Whole Foods Market just opened in Tulsa at the previous Wild Oats Market Inc. store. The store's opening came after the company reported profit dropped 31 percent in the third quarter. Company officials said that is partly due to the economy, and the cost of the nationwide acquisition of Wild Oats.

Despite the nationwide drop, Darla Snyder, community marketing specialist for Whole Foods, said the Tulsa store has seen a bump in sales since converting to Whole Foods.

She said they are offering more sales in order to stay comparable to conventional grocery store prices.

"Especially with fuel prices the way they are we encourage our guests to be more educated about how they shop," she said. "We offer value tours in a store to highlight where you can go to get the best bang for your buck."

Taylor said she thinks the health movement will not become another outdated trend. She said many customers have been health- conscious for years, and have gotten accustomed to the variation in food prices.

"The focus to eat more nutritional foods, the desire to sustain the environment as well as the whole greening of America is just part of a bigger movement," she said. "I think it will continue to grow, I don't see a drop-off in interest."

Originally published by Heather Caliendo.

(c) 2008 Journal Record - Oklahoma City. Provided by ProQuest LLC. All rights Reserved.