Hi Conrad.
I have researched this topic quite a bit recently. The consensus for the best approach is:
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Use www.natureshop.com as your main site
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Use geo-targeted folders for your country-based sites such as www.natureshop.com/au
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Treat the folder pages as home pages for each country. Each of those pages should receive local links from their respective countries.
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Re-direct traffic from the old sites to the same pages on the new sites. Do not take the easy way out and simply 301 all pages to the home page for their country.
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Build your site for each COUNTRY, not language. For example, the US pages should use American spellings such as "center", and American measurements such as Dollars.
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Use the meta language tag to indicate the language used on each page. EN = US, GB = England, etc.
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Use country flags in a prominent location to allow users to find their country's pages. The flags are much more identifiable then letters.
can we deploy the same pages and content on the different geo targeted sub folders (with some subtle regional variations of spelling and language) or will this result in a duplicate content penalty?
You should not have any issues with duplicate content by following the above process. Google will understand your pages are specific to languages and countries based on your meta tags, folder structure, and Google WMT settings.
For the UK site, I would work to resolve all Panda issues and confirm the penalty is gone prior to moving that site. I would be interested to hear from others on this topic as I lack experience in this area. If the UK site was merged into the main site, would the Panda penalty only apply from Google.co.uk? Or could Google.com apply the penalty as well?
PS. I really love your business model. Free shipping, 1 year return policy, etc. shows a tremendous amount of confidence in your products. I would recommend adding some trust symbols. The BBB symbol, TrustE and Verisign or McAfee are the ones I prefer.