Natural Foods Merchandiser

London calling, Whole Foods says

Whole Foods Market revealed offshore expansion plans Aug. 19, announcing a 75,000-square-foot store in London.

The Austin, Texas, chain will remodel the first three floors of a former department store on London?s Kensington High Street into a showplace like its Columbus Circle store in Manhattan.

Whole Foods operates seven Fresh & Wild stores in London and Brighton, after purchasing the chain in 2004. At an average of 5,200 square feet, existing Fresh & Wild stores will be dwarfed by the new Whole Foods, due to open in early 2007.

?No one has ever tried 75,000 square feet before in London, exclusively devoted to organic and natural,? said Simon Wright, an organic consultant in London. ?From first announcement of market entry to opening will be exactly three years, showing how difficult it has been to find sites.?

Whole Foods declined to comment, but the British newspaper the Daily Mail said the company has announced a search for ?up to 70 large sites in the United Kingdom.?

Whole Foods Chairman John Mackey said in a press release that the London store will be the first of many ?spacious urban locations? in the U.K. and Europe.

U.K. retail analyst Bernice Hurst termed the Kensington High Street location ?a very busy street, quite near a tube station and several tourist attractions, and the people who live in the area are certainly mega-rich, so [they] can afford the prices,? she said.

That differentiates what the Daily Mail called ?Whole Pay Cheque? from other British supermarkets, where, according to the newspaper, ?price wars have dominated … for the past decade.?

The U.K. market for organics has doubled in the last five years to roughly $2.2 billion, according to Organic Monitor, a London-based market-research firm. Supermarkets carry many more organic and natural SKUs than stateside counterparts, Hurst said.

Some of the innovations of the Columbus Circle store may not impress Londoners, whose major department stores such as Harrods and Selfridges boast opulent ?food halls? and in-house eateries. Wright noted that Sainsbury?s, one of Britain?s largest chains, relaunched its organic private label line in August with 400 items in designer packaging. Upscale Waitrose supermarkets emphasize culinary innovation, giving the lie to clichés about bad British food—and posting sales last year of $5.4 billion, up 10 percent.

But Whole Foods? combination of size, price and natural/organic selection gives retail watchers pause.

?I have been impressed with similar-sized Whole Foods in the USA, but am not convinced this is the way to go in the U.K.,? Wright said. ?I will be fascinated to see how they get on.?

Natural Foods Merchandiser volume XXVI/number 10/p. 11

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