Wild Oats Markets (OATS) isn't your run-of-the-mill food chain: It specializes in natural foods. And every Wild Oats shopping bag bears the home phone number of CEO Mike Gilliland, seeking comments or questions about this No.2 natural-food supermarket. Now, it appears that No.1 Whole Foods Market (WFMI) may call Gilliland about a buyout: Although the two are bitter rivals, Whole Foods may be interested in Wild Oats ''for practical business considerations,'' says one New York investment manager who has snapped up Oats shares.

''That may be how the rivalry plays out,'' says Gary Giblen, managing director at investment firm First Albany. Shares of Oats have risen to 26, up from 17 in early September. Meanwhile, Whole Foods stock has dropped to 43 from 70 in late March.

''Wild Oats has proved its resilience to competition from Whole Foods,'' says Giblen. Wild Oats operates 60 stores in Canada and the western U.S. The natural-foods business produced high margins but is fiercely competitive, he notes. In 1996, Whole Foods acquired the third-largest chain in the business, and Wild Oats bought the fourth-largest. Between them, they corner 12% of the market, with Whole Foods more than twice as large in sales. Sales of natural foods amount to $14 billion, or just 3% of all grocery sales of $375 billion.