Whole Foods first entered the UK in January of last year when it acquired Fresh & Wild, a chain of seven natural-food stores, for $38 million. However, those units are much smaller, at an average of 5,200 sf, than a full-line Whole Foods.
Company executives likened their European expansion to the company's push into New York City. In February 2004, the retailer opened the largest supermarket in the city, a 59,000-sf location in the Time Warner Center. The grocer currently operates three stores in Manhattan, and Whole Foods officials are said to be looking aggressively at sites Downtown.
Whole Foods' main barrier to entry in Europe will be locating large plots of real estate at affordable prices, "For them to find big stores is not easy and is going to take a long time," Jason Whitmer, a retail analyst at Cleveland-based FTN Midwest Securities Corp., says.
There is likely a demand for more stores on the continent, but it is too soon to tell if While Foods can carry its success in the US across the Atlantic, Whitmer says. "It's too soon to draw a conclusion about whether or not this is going to be a home run," he says.
During its Q3, which ended July 3, Whole Foods opened three stores in North America and executives plan an additional five openings by the end of the company's fiscal year, brining its total store count to 175. In addition, the grocer has 10 signed leases in the US, including agreements in Dallas, Hollywood and Minneapolis.
The firm's year-over-year same-store sales for Q3 rose 15.2%, and sales jumped 23%, to $1.1 billion. Net income shot up 31%, to $41.7 million.
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