Showing posts with label new store development. Show all posts
Showing posts with label new store development. Show all posts

Wednesday, August 20, 2008

Guest Retail Memo: A Brooklyn, New York USA Neighborhood That's Just 'Too Good' For Whole Foods Market, Inc. Not To Open A Store In

The Gowanus Canel, in Brooklyn's Gowanus neighborhood, which is one of the last industrial tracts to be developed in the area, sits close to where Whole Foods Market, Inc. first proposed locating a store in 2004, and still hasn't ruled out, despite making little progress in the four years since making the announcement.

From the Natural~Specialty Foods Memo Editor's Desk: To paraphrase the classic American book, "A Tree Grows in Brooklyn" (New York USA), and the 1945 classic movie of the same name, we wonder: Will a Whole Foods Market natural foods superstore ever bloom in Brooklyn's Gowanus neighborhood?

As we reported last week, Whole Foods Market is cutting back to 15 from 25 -to- 30 the number of new stores it plans to open in 2009, on the heels of announcing a 31% decline in net profits last week for the most recently ended quarter.

Those plans include "revising" its plans to open a store in Brooklyn New York's Gowanus neighborhood, where it first announced it planned to open a Whole Foods Market natural foods and products emporium in 2004. Our sources tell us the Gowanus location is on hold, as Francis Morrone writes in the story below in tomorrow's New York Sun newspaper.

Ms. Marron's piece is an interesting back story to the Gowanus Whole Foods site and the neighborhood in general. It's a neighborhood she suggests is just too good of a location for Whole Foods to not build and open a store in.

Gowanus, Where Irony Meets Hope
By FRANCIS MORRONE, New York Sun
August 21, 2008

In 2004, the Austin, Texas-based gourmet grocery chain Whole Foods Market, which by now has five Manhattan stores, said it was going to open a store the next year on a mostly empty lot at the southwest corner of Third Avenue and 3rd Street in Brooklyn. The next year came, and Whole Foods announced a new opening date: early 2007. Early 2007 came; there was no Whole Foods in Gowanus.

In the last quarter, the chain posted a 31% net income loss, and announced it is "revising" — not abandoning — its Brooklyn plans.

That Whole Foods should still be thinking of opening a store on a toxic floodplain (hence the delays) tells us something about the site. Namely, it's a location too good to be true. The same may be said of much of the oft-maligned part of Brooklyn called Gowanus.

Gowanus is the neighborhood along both banks of the Gowanus Canal, abutting Park Slope to the east and shading into Carroll Gardens to the west. Once, there was a Gowanus Creek, a meandering freshwater stream that flowed from Gowanus Bay (which separates the South Brooklyn neighborhoods of Red Hook and Sunset Park) approximately as far north as the canal extends today, or roughly to Douglass Street in Boerum Hill, a neighborhood once known as North Gowanus.

In the 1850s the creek was straightened out to be made into a navigable canal to serve inland industries. It got its biggest boost in 1869, when Edwin Litchfield dredged it, drained the neighboring marshlands, and built four sizable basins, along which factories and warehouses flourished until after World War II. A number of factories and warehouses, some still making use of the waterway, operate there to this day.

Litchfield owned the land that sloped westward from Brooklyn's terminal moraine, atop which in 1854-57 he built his spectacular house, later absorbed into Prospect Park and still standing.

On the upper portion of Litchfield's land rose the late-19th-century neighborhood of Park Slope. The marshy lowlands, Litchfield felt, were unsuitable for fine residences, but perfect for a canal, factories, and warehouses, interspersed with humble homes of factory workers.

As factories were built, the canal became horribly polluted. The water became an oily sludge with a sickly lavender color and an unbearable stench. In 1911 a great pump was constructed at the northern end of the canal so that fresh water could regularly flush out the channel.

The pump broke in the 1960s. All the ordinary delays ran up against the 1970s fiscal crisis, and the pump stayed broken. The canal re-putrefied until 1999, when the pump was fixed — and, we believed, a new day had dawned for Gowanus.

By then, Park Slope and Carroll Gardens were scorchingly hot real estate markets. Visions emerged of splendors that might rise along the waterway's banks — some invoked Venice, others San Antonio — infilling this once seemingly impenetrable divider between the two neighborhoods.

It's been slow to happen. Toxic residues left from the halcyon industrial days have proved a greater problem than developers expected. Cleanup costs are sky-high — and perhaps can't be justified in the recent economic downturn. Some environmental scientists even say that much of Gowanus's ground is so contaminated it simply cannot be adequately cleaned up, at any cost.

And the old pump should have been replaced, not repaired; its inefficiency hasn't quite cleaned up the canal as we'd hoped. The city says it will build a new pump, to be ready in 2012. With city projects stalling left and right for want of funds, it's likely we'll miss that goal.
Meantime, Gowanus goes its sweet way. The vistas stun, the old bridges crossing the canal are beauties, there are classic factories and warehouses, and artists and arts organizations have flocked to the area.

In 2006, the New York City Landmarks Preservation Commission landmarked the New York and Long Island Coignet Stone Company Building, which stands at the southwest corner of Third Avenue and 3rd Street, on Whole Foods's property. Designed by William Field & Son and built in 1872-73, it's the oldest known concrete building in the city.

It served as offices of a large concrete manufacturing complex specializing in the patented Beton Coignet that was invented in France in the 1850s. Now in an advanced state of deterioration, it had artificial brick put on it in the 1960s. The two-story Italianate building looks as though it's an old mansion incongruously set in an industrial wasteland.

The architecture critic Lewis Mumford took a walk around Gowanus in 1952, and described "grimy factories and warehouses and gas tanks" and "empty lots and industrial rubble" — evoking "a segment of a bombed city."

In the midst of this emptiness, the Brooklyn Improvement Company, whatever that may be, occupies a classic stucco mansion, standing ... in ironic solitude — or should one say hopeful anticipation?

Brooklyn Improvement Company was the name of Litchfield's concern, which owned the land the concrete company occupied. That company was short-lived, and by 1882 the Brooklyn Improvement Company had made the "stucco mansion" its own offices, which it would inhabit until 1957.

Fifty-six years after Mumford wrote, and we still don't know if it's ironic solitude or hopeful anticipation.

Friday, March 14, 2008

Retail Memo: Whole Foods Market to Dramatically Expand in the United Kingdom; Will Open Up To 30 New Stores in the U.S. in Fiscal 2009


Austin, Texas-based supernatural and lifestyle grocer Whole Foods Market, Inc. plans to expand from its current one store in London, England under the Whole Foods' banner, to additional stores in the London Metropolitan region and elsewhere in the United Kingdom.

In addition to its current 75,000 square foot Whole Foods Kensington High Street flagship store in London, Whole Foods Market, Inc. owns the small natural and organic foods' chain Fresh & Wild, which it acquired from its British owners about four years ago. The Fresh & Wild natural and organic foods' markets are located in and around London.

At the time of the Fresh & Wild acquisition, Whole Foods' CEO John Mackey said the grocer was buying the British-born natural foods chain in part as a stalking horse, in that it would provide a base of business in the UK so that Whole Foods could eventually start opening larger stores under its Whole Foods banner. Mackey also said then, and repeated recently, that most if not all of the grocer's new stores in the UK would be under the Whole Foods banner rather than Fresh & Wild.

The grocer started doing just that almost a year ago when it opened its first Texas-sized (75-k square foot) Whole Foods Market in London. The London flagship store got off to a bit of a slow start. However, business has picked up dramatically over the last couple months.

We've now learned Whole Foods has hired a two commercial retail agencies in London to search for new store sites in the London Metropolitan area and beyond in other parts of the UK.

Those two agencies, Green & Partners and Gilbert, have been given marching orders from the grocer's Austin, Texas corporate headquarters to look for potential store sites of between 20,000 square feet -to 75,000 square feet within an hour or so drive from central London as the top priority, and elsewhere in the UK as the secondary priority. Twenty thousand square feet is considered a very decent-sized supermarket in London. Seventy five thousand square feet--the size of the grocer's flagship store in London--is considered a massive supermarket in the region.

Whole Foods has taken a further step, which demonstrates the grocer is serious about its UK expansion. That step is the hiring of Nina Shores, who is the former retail property director for British retailer Bank Fashion, to head up the supernatural grocer's UK expansion program.

Additionally, during a recent trip to the store in London, numerous store-level employees mentioned to us they were aware that Whole Foods' is looking for sites throughout the UK. One store team member said he was thinking about quiting because of a lack of advancement opportunities at the single store. However, he said he was told by a higher up not to worry because the grocer was going to be opening many stores in the next few years, and that there would be multiple opportunities soon.

Whole Foods' target customer in the UK is similar to its target shopper at home in the U.S. College educated, and post undergraduate degree-holders, are key. Upper income is a key demographic as well. Additionally, ethical consumers, "greens" and health conscious shoppers round out Whole Foods' key variables when looking for neighborhoods to locate it new United Kingdom stores in.

There are plenty such neighborhoods within a one hour's drive of central London. And many more throughout the United Kingdom. Further, London is arguably the current global capital of ethical and green or sustainable consumerism, which fits Whole Foods' retailing and merchandising philosophy extremely well.

UK upscale supermarket chains Waitrose and the Co-op (and Sainsbury's in part) are currently the primary grocers of choice for London Metro region consumers who fit the Whole Foods' demographic profile.

And, of course, there are the Whole Foods'-owned Fresh & Wild stores already in the area. Those stores are much smaller than a typical Whole Foods' banner store, and as a result carry a much smaller selection of natural and organic products. They also don't have the extensive in-store prepared foods venues and other special lifestyle features that a 45,000 -to- 80,000 square foot Whole Foods' banner store does. They do have a nickname similar to Whole Foods' "Whole Paycheck" in the U.S. though. The British wags call the stores "Fresh & Wildly Expensive."

Our UK industry sources have told us a number of sites in Metro London and elsewhere in the UK have been rumoured to be high on the short list of possible locations for new Whole Foods' banner stores. These potential sites include: numerous locations in the city of London, the dockland banking district's Canary Wharf, Manchester, Bristol and Edinburgh.

We, nor do our UK sources, know the number of Whole Foods' banner stores the grocer wants to open in the United Kingdom. What we do know though is Whole Foods Market, Inc. knows it needs a critical mass of stores in the region in order to do its brand of merchandising and promotion. As such, we believe the supernatural retailer will embark on a multi-year new store development program in the UK--beginning first with opening new stores and filling out in the London Metropolitan region.

Along with that strategy, we see the grocer opening stores at the same time--but at just a slightly slower pace--in key parts of the UK that fit its education, income, environmental and ethical consumer demographic variables best. In other words, the UK is no longer a mere retail test for Whole Foods Market, Inc.. Rather, it is along with Canada becoming nearly as important corporately as the grocer's U.S. expansion plans are.

Whole Foods' to open up to 30 new stores in U.S. in 2009

Speaking of those U.S. expansion plans. Whole Foods' announced today in a filing with the U.S. Securities and Exchange Commission that it plans to build and open between 25 -to- 30 new stores in the U.S. next year. That's a new store opening somewhere in the U.S. at a rate higher than one every other week.

The 29-30 new stores will all likely be no smaller than 45,000 square feet (except in special cases like urban neighborhoods where there are geographical limitations of course) and as big as 80,000 square feet. The new stores also will be located both in regions like Texas and the west and east coasts, where Whole Foods' already has a substantial number of stores, and in new areas of the U.S. where the grocer has little or no current retail presence.

Whole Foods also is set to open its Whole Foods Express small-format, convenience-oriented prototype store in a renovated former Wild Oats market building in Boulder, Colorado later this year. If that test--and format--proves successful, we could see the supernatural grocer join the growing small-format grocery store revolution in the U.S. with additional Express stores in other parts of the country perhaps even beginning next year.

From what we've been able to learn thus far, the Whole Foods Express format will be about 15,000 square feet -to- 20,000 square feet in size. It will feature a limited selection of natural and organic grocery products, fresh produce and meats and other perishables.

A key feature of the Express store will be an extensive selection of natural, organic, healthy and tasty ready-to-eat and ready-to heat prepared foods. We also expect to see some sort of an in store cafe in the Express store, as well as a small version of a Whole Foods-style in-store Bistro food service venue.