In order to resolve an antitrust dispute, Whole Foods Market (NASDAQ: WFMI) announced that it will sell the leases and assets of 31 operating and non-operating Wild Oats stores that it acquired in 2007. In return, the Federal Trade Commission has agreed to drop its opposition to the merger of the two chains.

As the Wall Street Journal recently noted, when Whole Foods originally acquired Wild Oats, the FTC attempted to block the merger, claiming that would "lessen competition in the market for natural and organic foods." Although a federal judge rejected the FTC's claim, a subsequent appeal reversed that ruling, propelling the Whole Foods/Wild Oats merger into a state of limbo -- over a year after the acquired stores had already been converted to Whole Foods markets.

After two years of legal wrangling, the situation seems to be resolved.

In addition to paying a $19 million settlement charge, Whole Foods must divest itself of the 31 Wild Oats stores within six months, although it has the option of applying for a further six-month extension. As 24/7 Wall Street pointed out, this situation is a win/win for Whole Foods. The chain was already closing redundant stores; selling them should not be too much of a hardship. Moreover, the new owners will be at a competitive disadvantage, as it will have to negotiate contracts with companies that are already competing for Whole Foods' shelf space.

More to the point, this two-year exercise has enabled Whole Foods to effectively dismantle one of its competitors -- a goal its famously cut-throat CEO had been pursuing for most of the decade (one internal email about Wild Oats, revealed in the course of the FTC battle, read, "I want to crush them and I want to spend a lot of money in the process"). With sales of organic foods on the decline, Whole Foods finds itself in the enviable position of having fewer competitors for market share. After the announcement, Whole Foods' shares rose 2%, to $12.03.

In the end, however, Whole Foods may be looking in the wrong direction. While slaughtering other premium organic grocery stores will undoubtedly improve their market share, a greater threat would seem to be presented by stores that offer organic produce at cheaper prices. With its low overhead and ever-increasing popularity, Trader Joe's has positioned itself as the go-to store for price-conscious shoppers who want to eat healthily. In fact, with numerous competitors and imitators trying to imitate the TJ's formula, "Whole Paycheck" may want to consider appealing to the healthy, if not wealthy, section of the public.