Whole Foods Market could increase its presence in Massachusetts by nearly 30 percent if a deal with Johhnie's Foodmaster goes through, the Boston Globe reported Thursday.
Whole Foods Market is in talks to buy or take over leases for half a dozen Johnnie’s Foodmaster locations in eastern Massachusetts, possibly bringing an end to one of the last urban family grocery chains, according to several real estate officials briefed on the deal.
Whole Foods would not comment on plans to acquire the 65-year-old, locally owned chain. But one expert said the deal would make sense for both businesses.
Kevin Griffin, publisher of the Griffin Report of Food Marketing, said Whole Foods could be an attractive out for Johnnie’s Foodmaster because it is usually difficult to exit a family-owned grocery business and get paid for it. The deal makes sense for Whole Foods, he said, because the company is attempting to open smaller markets and defend against rivals.
In Whole Foods' July earnings report, officials said the chain has operated 21 smaller stores for six months, each at 38,000 square feet. Its traditional stores range from 50,000 to 70,000 square feet. The smaller stores' average weekly sales are $575,000, which translates to $786 in sales per square foot and generates a contribution margin of just less than 6 percent.
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