The Southern California supermarket strike was a double-edgedsword for Wild Oats, according to Perry Odak, president and CEO ofthe company, who said year-to-date net sales were bolstered by thepositive benefit of the California United Food and CommercialWorkers strike against conventional grocery retailers in SouthernCalifornia, which ended in February.

But the strike also produced a negative impact in that WildOats' sales in the first three quarters of this year have been"adversely affected by conventional grocers' overly aggressivepromotional activity in Southern California." Odak suggested thatWild Oats would have been hard pressed to compete againstconventional grocers, who spent at least $100 million in the thirdquarter alone, after taxes, to rebuild their businesses.

"We chose not to go head-to-head in July and August becausethose are usually the slowest months in food retailing, but we knewthere would be a point when we had to protect our customer base inadvance of the big fourth-quarter food holidays," Odak said inThursday's conference call. "We chose early September to invest inpricing and promotions that we continued through October andNovember." The promotional spending "had an adverse impact on ourthird quarter margins," Odak said, but Wild Oats believes thepromotional spending was "the right thing to do to protect andmaintain our customer base."