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EDMONTON, Alta. - Planet Organic Health Corp., which runs large natural food supermarkets in the Canadian provinces of Alberta and British Columbia, will pay CAN$4 million (US$3.034 million) in cash and stock for Sangster's, a 35-store national chain that sells vitamins and supplements.
"What made the deal so appealing was the fact that they are profitable and that the 35 locations give us a better foothold in the market for expanding," v.p. of corporate development Darren Krissie told Progressive Grocer. "We are also acquiring the expertise of Sangster's management. The mentality of running a supplement store is different from that of running a big store like ours, and we needed people who could do that. Plus they are experienced in putting together a supplement private label for their vitamin line, and will give us more buying power where vitamins and supplements are concerned."
He added that the Sangster's stores, which run in the neighborhood of 1,500 square feet, are a good complement to Planet Organic's market stores, which, at 8,000 to 10,000 square feet, offer a mix of natural and organic foods and groceries. The acquired stores will maintain their brands.
This is part of Planet Organic's long-term growth strategy, which is to continue acquiring stores across Canada and eventually in the United States. "The Canadian marketplace for natural and organics is not as big as in the U.S., but is still a decent market for us -- we are in the top five," said Krissie. "Whole Foods has come in, and Wild Oats is here, too, and we see that as both an opportunity and a challenge. They focus on larger-store formats, while we focus on smaller, more focused stores."