Two years ago, Whole Foods announced that it wanted to expand to 1,000 stores from a little more than 300 and open in smaller and less urban markets. At the time, Whole Foods’ competitors snickered at the strategy and Wall Street, although enamored with the chain’s previous success, expressed doubts that such forays would succeed, according to a recent New York Times article.
Like most grocery chains, Whole Foods does not release sales data on individual stores. But two years after disclosing its plans, it turns out that more shoppers do want what Whole Foods offers, more than the experts had banked on. Whole Foods has opened a store in Detroit and in Boise, Idaho about a year ago. Boise’s 212,000 residents, many of which are college students and migrants from the cities where Whole Foods raised the bar on the grocery business, are embracing Whole Foods with enthusiasm, propelled its stock price to heady highs and surprised even its executives. “I really did wonder what they were thinking,” said Meredith Adler, an investment analyst at Barclays Capital who follows the company. “But at this very early stage, the strategy does appear to be working.”
“I was so excited when I heard it was coming here I even bought the stock,” said Beth Brigham, who drives about a half-hour — a trek by Boise standards. “I really like organic, healthy stuff, and the selection in other stores here was much more limited.” “I do shop at regular groceries, but I like organic products and often am looking for things that are a bit unusual,” said Anne Madsen, another Whole Foods enthusiast.
The two shoppers exemplify the trends that Walter Robb, co-chief executive of Whole Foods, said were driving the company’s success overall, and particularly in smaller markets where shoppers might once have rolled eyes at a store promoting the virtues of locally grown fava beans and quince. “Farmers’ markets were nonexistent 10 years ago in most places, and no one was talking about local food,” Robb said. “There is a whole revolution going on around food now that isn’t limited to the coast. Consumers know more about food, where it comes from, what’s in it, and the connection between diet and health.”
Roughly one-third of the stores Whole Foods plans to open will be in cities like Boise. This month, it opened one in Lincoln, Nebraska, population 260,000.
