Monday, February 17, 2014

Whole Foods eating itself?

Austin-based Whole Foods is in the midst of a growth spurt - one that includes two new stores in Charlotte - but the specialty retailer is disappointing some investors with its results.

Whole Foods trimmed its estimates for revenue growth as part of its quarterly earnings last week, for the second quarter in a row. The weak economy

But as Whole Foods announced it now plans to expand from 373 stores to 1,200 over the coming years, analysts were also asking about another problem: Sales cannibalization.

Whole Foods executives acknowledged that the wave of new stores can cut into sales at existing stores. But they said they expect it will pay off in the end.

"These urban markets, we're able to cluster our stores closer together, and although there is a short term cannibalization effect that of course hurts (comparable sales)," said one executive during last week's earnings call. "We see when the stores anniversary, that the stores that were cannibalized come back with very strong (comparable sales)."

Locally, Whole Foods has a store in SouthPark, and is building a second supermarket in Huntersville. Last week, Whole Foods announced it plans to build a third store in south Charlotte in the Waverly development on Providence Road.

The south Charlotte store is about a 10 mile, 15 to 20 minute drive from the SouthPark store. It looks like Whole Foods is betting that there is enough demand south of I-485 to justify putting another store in that radius.

So, what do you think - is there enough demand in Charlotte to sustain another two local Whole Foods stores?


pHenomenalhairstylist said...

Definitely in Huntersville! I like Whole Foods hot bar much better than Earthfare. Also, I would love to have a Trader Joe's in the Lake norman area.

Garth Vader said...

There needs to be a quality grocer on the NorthWest/Mountain Island Lake side of town. Every other area has MULTIPLE quality grocers. SouthPark/Fairview has EarthFare, Fresh Market and Whole Foods. Huntersville/Davidson has Healthy Home Market, Fresh Market, and now Whole Foods. Midtown/SouthEnd has Healthy Home Market and Trader Joe's.

Northwest/MIL? Nothing.

Robert Settle said...

York County needs one ASAP!
Where is the Huntersville store going to locate?