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Retailer Battles to Keep Data Private
Two US-based retail chains are in dispute over a subpoena which would require one to hand over to its much larger competitor business information including two years' worth of weekly store sales figures.
Texas-based major chain Whole Foods Market Inc., with 270 stores in the US, Canada and the UK, needs to prove to the Federal Trade Commission that its $565m purchase of Wild Oats Markets Inc. last year did not create a national monopoly in the natural foods sector. Portland-based grocer New Seasons Market, with nine outlets, is just one of 96 natural grocers across the US that have been asked to give up the information, but has come out fighting over whether the transfer is necessary or acceptable in a competitive environment.
New Seasons has filed a legal motion to quash the subpoena, and CEO Brian Rohter has blasted the process on his firm's web site. For one, Rohter says he believes Whole Foods can prove its case without the competitor info: 'The question here is whether there's a monopoly and clearly, in Portland, there's no monopoly in the natural foods market. Just open the phone book.' Secondly, Rohter is not convinced his data will remain private - he cites a leak during a similar investigation into the merger last year, and adds: 'There's just not adequate protection for us - there's no penalty for releasing the information, and if Whole Foods decides they want to use it for evidence, we only have five days to prove why they shouldn't.'
Whole Foods however contests that 'No competitor will be disadvantaged by complying with the subpoena because all responses are subject to an FTC-issued protective order... precluding any of this information from being shared with any (Whole Foods Market) employee, including in-house counsel. Only outside counsel and their consultants can see this information.' Rohter says accepting such an argument would be 'like trusting the fox to guard the henhouse'.
In addition to sales stats, the comprehensive information covered by the subpoena includes 'all documents discussing competition with Whole Foods or Wild Oats' and 'all market studies, strategic plans or competition analyses relating to the sale of natural or organic products'.
The FTC is online at www.ftc.gov .
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