Saturday, October 11, 2008

Retail Memo: Innovative Virginia Natural Grocer Ellwood Thompson's Local Market to Open New Store in Washington, DC USA in Fall 2009

Pictured above is an artist's rendering of the new Ellwood Thompson's Local Market natural grocery store to open next fall in Washington DC's Columbia Heights neighborhood. [Source: Elwood Thompson's Local market.]

Ellwood Thompson's Local Market, the largest independent natural grocery in Virginia, is expanding into the nearby Washington, DC market.

The currently single-store independent natural foods' retailer, which is now 20 years old, has signed a lease for a 15,000-square-foot store in the new DC USA development at 14th and Irving streets (the Columbia Heights neighborhood) in the U.S. capital city. The new store, the first in Washington, DC for the natural grocer, is scheduled to open next fall.

"We've been interested in the communities along (Washington D.C.'s) the 14th Street corridor as the home for our second store for quite some time," says Ryan Youngman of Ellwood Thompson's. "We walked the community and talked to the people. The overwhelming support we received from residents confirmed this is the perfect place to expand. Our commitment to environmental sustainability and conservation along with organics and clean local food is a perfect fit for these neighborhoods."

Putting an emphasis on locally-grown food and grocery products produced within a 100 miles of its current store in Richmond, Virginia has been a key point of competitive positioning and differentiation for the independent natural foods retailer. In fact Locavors, those consumers who try to purchase and eat only locally-produced foods, consider "local foods" those grown no more than 200 miles from where they live. Ellwood Thompson's does that official definition 100 miles better at its Richmond, Virginia store.

Natural and organic product offerings in the new Washington DC natural grocery store will include: naturopathic vitamins, supplements and personal care, products; local produce; bulk foods; fresh meats and seafood; wine; cheeses; and fresh baked goods, according to Ryan Youngman.

Prepared foods from "Ellwood's Kitchen" will be led by award-winning chef and vegan cookbook author, Jannequin Bennett, according to the retailer.

"The prepared foods offerings will cater to intentional eaters as well as provide a variety of natural, organic, and ethnically diverse dishes. Those who elect to eat vegetarian, vegan, gluten-free, and/or raw foods will find plenty of options in all departments," Ryan Youngman says. Additionally, the store will offer in-store and outdoor community seating with wireless Internet available so customers can use their laptop computers and other wireless devices while they sit at the indoor or outdoor tables having coffee or eating.

Ellwood Thompson's also plans to extend the "green" retailing practices it currently has at its Richmond, Virginia store to its second store in Washington, DC when it opens next fall.

Those pro-environmental practices include offering store employees and shoppers incentives for conservation and recycling in the form of monetary "envirocredits" for walking, biking and mass transit and for reusing shopping bags, water and food containers. The independent natural products' retailer isn't anti-automobile though. It will offer free parking in an underground parking deck located below the new store.

Ellwood Thompson's is an innovative, independent natural foods retailer. You can read about some of its innovations, as well as its prepared foods offerings and other merchandising and operational aspects, at its store Blog here.

Who says Whole Foods Market is a barrier to new retail entry?

Even though Whole Foods Market, Inc. plans to increase its store count in Washington, DC (although no new stores are set to open in the district next year) from its current three units, as well as Maryland-based 5-store My Organic Market (MOM) getting set to open a store in Washington DC (its sixth store and first in the district), Ellwood Thompson's decision to put its second store in DC shows there's still room in such competitive markets for natural products' retailers who create points of differentiation like the independent natural grocer does with its local foods program and numerous other unique merchandising and operations practices.

It also shows, as we argue regularly in Natural~Specialty Foods Memo, that despite the continued folly of the U.S. Federal Trade Commission (FTC)in claiming Whole Foods Market, Inc. is a monopolistic natural foods retailer (the FTC plans to hold a new hearing on the issue in February, 2009) post its acquisition of Wild Oats Markets, Inc. even though Whole Foods' stock took another beating last week and is now at least 55 -to- 60-% lower than it was when is acquired Wild Oats last year, reported a 40% drop in net income last quarter and laid off 42 headquarters employees last month, the marketplace says otherwise.

For example, Locally-based My Organic Market continues to expand in the market. Safeway Stores, Inc. plans to remodel its Georgetown neighborhood store, expanding it to about 60,000 square feet and adding thousands of new natural and organic products and numerous in-store prepared foods departments, using its expanded Lifestyle format which puts an emphasis on the natural, organic and specialty foods categories across all store departments. [One of Whole Foods' three DC stores is located in Georgetown.]

And of course innovative Ellwood Thompson's Local Market, which also offers specialty and gourmet food products along with natural and organic, now plans to build and open a brand new store in Washington DC. Rather than Whole Foods having a monopoly position in the Washington DC market, as well as is the case throughout the U.S., it's going to have to face even stiffer competition than it already has.

Washington DC is just one of the many examples of markets where independent multi-store natural products retailers such as Sprouts Farmers Market and Sunflower Farmers Market in the Western U.S., and other multi and single-store natural products retailers there and elsewhere, are challenging Whole Foods throughout the U.S. There's no Whole Foods Market, Inc. monopoly in the real world of main street.

Upscale supermarket chains are doing the same thing. Publix in Florida, Wegmans in New York, HEB and United Supermarkets' Market Street chain in Texas, Raley's in Northern California, Fresh Market in the South -- all of these supermarket chains and many more pose a competitive challenge to Whole Foods since their stores not only sell conventional groceries but put a major emphasis (and are designed similar to Whole Foods' stores) on natural, organic, specialty, gourmet and international food and grocery products, along with having a major focus on premium fresh, prepared foods.

Elwood Thompson's and DC's Columbia Heights

Ellwood Thompson's should find a warm reception when it opens its store in Washington DC's Columbia Heights neighborhood next fall. The neighborhood has lots of residents and the demographics are strong for natural and organic products retailing. [Whole Foods doesn't have a store in the neighborhood, nor is the DC My Organic Market store slated for the neighborhood.]

At 15,000 square feet the size and scale of the store also fits well into the neighborhood. It's big enough to be able to merchandise a strong multi-category offering but not so big so that it will look out of scale in the urban neighborhood.

The grocer's fresh, prepared foods offerings, along with the new store's indoor and outdoor seating with Wi-Fi, also should go over big in the neighborhood as it's residents like to spend time in neighborhood cafes and participate in urban street life.

Who knows, maybe even a U.S. Senator or two will stop by for some locally-produced fresh produce or one of Ellwood's ready-to-eat prepared foods dishes, along with offering a photo opportunity?

In fact, since it's true Michelle Obama likes buying natural and organic foods for her family, and has been known to shop at the Whole Foods Market store near where she and her husband, Democratic candidate for President Barack Obama, live in Chicago, Illinois, maybe if Senator Obama gets elected President in three weeks, he and the new first lady will do a little shopping at the new Washington DC Elwood Thompson's natural grocery store when it opens its doors next year in the capital city's Columbia Heights neighborhood?

The neighborhood isn't all that far from the White House -- especially if you have a car and driver at your disposal 24 hours a day and a secret service motorcade to speed up your trip to the store.

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