Whole Foods Market, a high-end organic food store dubbed, “America’s Healthiest Grocery Store,” is making its way into Massachusetts—and fast. The construction of six new Whole Foods Markets in Massachusetts has not yet been confirmed; however, the grocer is reportedly in negotiations to either lease or purchase, “6 of 10 Johnnie’s Foodmaster sites in Arlington, Brookline, Charlestown, Melrose, South Weymouth, and on Beacon Street in Somerville” [Boston.com]. This aggressive expansion is characteristic of the company, which has previously obtained regional markets including Mrs. Gooch’s (Los Angeles), Bread & Circus (Massachusetts), and Wild Oats (National). Whole Foods Market is one of few grocery stores that has remained relatively unaffected by a struggling American economy.
In fact, Whole Foods has weathered the storm quite well. In 2004, Whole Foods did what few supermarkets have done—it expanded internationally. Like many companies, Whole Foods reported significant loses on its international ventures in 2008 due to fears of global recession, but by 2011 the company reported an 8% increase in global sales for all quarters—an incredible recovery for a high-end consumer brand. Over the years, Whole Foods has built more than an organic food chain. Thanks to its high quality produce, excellent reputation, and aggressive expansion, Whole Foods has increased access to healthy foods and become the most recognizable and trusted name in the market.
Moreover, representatives have articulated interest in further expanding into smaller markets, primarily areas with a population of 75,000 and up. Of course, stores in these locations will be smaller, and therefore contain less variety, but Whole Foods believes it can thrive by reaching out to smaller communities. The recent success of Whole Foods has caught the eye of many investors and its stock currently trades at twice the Standard & Poor’s 500 Index valuation. Other major food providers, “Kroger Co. (KR), Safeway Inc. (SWY), and Target Corp. (TGT), trade at a discount” [Bloomberg.com].
In Massachusetts, Whole Foods currently operates in 21 locations, with two more under construction in South Boston and Lynnfield. By way of six more locations in the works, Whole Foods Market is set to increase its presence in Massachusetts by just under 30% [Boston Business Journal]. The increasingly large presence of high end markets in the Boston area reflects ever changing consumer preferences. Whole Foods has been nationally recognized as an upscale market for wealthy health-conscious clients; however, CEO John Mackey disagrees with this assessment. “The common link is education, not income,” Mackey says. “That correlates with income, but not perfectly” [Organic Consumers Association]. The well educated have flocked to Whole Foods, which appeals to a healthier demographic with its largely organic and eco-friendly array of products. Regardless, the ever increasing presence of Whole Foods is a good indicator of the changing consumer preferences in Massachusetts.
Contact: dfayngor@abgrealty.net