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MailTribune.com
  • Organic grocery may occupy former Ray's near mall

    Natural Grocers has 58 stores in 13 states
  • Natural Grocers, an organic grocery and dietary supplements retailer, apparently plans to open a store in a north Medford building that in recent years has held a grocery and a furniture store.
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  • Natural Grocers, an organic grocery and dietary supplements retailer, apparently plans to open a store in a north Medford building that in recent years has held a grocery and a furniture store.
    The second-generation firm, which became publicly traded on the New York Stock Exchange July 25, operates 58 stores in 13 states in the Mountain and Central times zones and has announced a half-dozen more openings for the first half of 2013. It is based in Lakewood, Colo.
    Although a Natural Grocers spokeswoman couldn't confirm the company's intentions, Leadership Circle LLC, a Colorado real estate development company that works with Natural Grocers, has submitted an application for a major remodel of the former National Furniture and Mattress store north of the Rogue Valley Mall.
    The firm is seeking bids from local subcontractors through the Medford Builders Exchange. The bids list Natural Grocers as the tenant. "We are constantly looking for markets that have people who care about nutrition and health, who are maybe underserved," said Merredith Branscombe, a spokeswoman for Natural Grocers. "We look all over the place. Medford is a great community, but I can't speak specifically to Medford."
    The 40,062-square-foot, big-box style building at 1990 N. Pacific Highway was originally a Ray's Food Place that opened in 1998. Lou and Kathy Budge bought it for $3.25 million six years ago and opened the furniture store.
    Lou Budge confirmed a pending sale of the building to a development firm but said the deal hasn't closed.
    Natural Grocers stores range from 5,000 to 14,500 square feet of retail space, with new stores averaging 9,500 square feet.
    "If you think of Whole Foods, they're comparatively like a Disneyland with a lot of lovely prepared food with a good mix of high quality conventional and organic food," Branscombe said. "Trader Joe's is in the middle, more affordable with a lot of frozen food. Natural Grocers is more geared to the (household) cook or people wanting fresher ingredients. We work hard to be affordable. We don't think a healthy lifestyle should be a thing that only a few can afford."
    Trader Joe's will open its Medford store in October across the Big X — where highways 238 and 99 intersect — from the Natural Grocers site.
    Natural Grocers stores carry about 18,000 natural and organic products, along with 7,000 dietary supplement items. Stores are staffed with 15 to 25 employees.
    The company sells only organic produce. "You don't have to decide whether something is conventional or organic," Branscombe said. "We try to source food locally whenever possible, but if someone in Colorado wants organic strawberries during the winter, that can't always be achieved."
    With national retailers arriving, Medford Food Co-op General Manager Emile Amarotico says it's indicative of Southern Oregon's desire for organic goods.
    "There is more and more awareness of good food in our market," Amarotico said. "I think Medford is seeing the time has come to have greater access to great food. We say this validates what people have said for years with local competition.
    "Fred Meyer has a natural store within a store, Sherm's, with Food 4 Less, has been working on their store-within-a-store for years. Now, clearly, Natural Grocers sees this. They must be doing their market research and reading the tea leaves, and the leaves say this market is ready for a greater presence."
    The Medford Food Co-op, situated at the opposite end of town at 945 S. Riverside Ave., marked its first anniversary last month, reporting $2.6 million in sales over the year. "Natural Grocers offers many of the same products we do," Amarotico said. "With their clout they will be able to offer some great deals. If all you are talking about is price, they will be very competitive. There is a reason why we raised over $700,000 to make this a store where people could have much more input through ownership."
    Natural Grocers opened 10 stores during fiscal years 2011 and 2012, but armed with fresh cash from its IPO, it anticipates adding 180 stores in its present footprint, with the possibility of 1,100 stores across the country.
    The retailer's initial public offering — priced at $15 per share — generated $48.1 million in net proceeds. The stock closed at $22.32 on Friday.
    Natural Grocers reported revenue of $264.5 million in fiscal 2011 and $246.5 million through the first three quarters of fiscal 2012. During fiscal 2011, the company earned $4.2 million, through nine months of fiscal 2012, and it netted $6.2 million.
    Reach reporter Greg Stiles at 541-776-4463 or email business@mailtribune.com.
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