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

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

"We chose not to go head-to-head in July and August because those are usually the slowest months in food retailing, but we knew there would be a point when we had to protect our customer base in advance of the big fourth-quarter food holidays," Odak said in Thursday's conference call. "We chose early September to invest in pricing and promotions that we continued through October and November." The promotional spending "had an adverse impact on our third quarter margins," Odak said, but Wild Oats believes the promotional spending was "the right thing to do to protect and maintain our customer base."