Midwest an 'exploding' region for Whole Foods

by Eric Schroeder
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CHICAGO — Whole Foods Market, the world's largest retailer of natural and organic foods, plans to open more stores in 2012 than any other year in its 32-year history.

Speaking to analysts convened at the William Blair Growth Stock Conference in Chicago on June 13, John Mackey, co-founder and co-chief executive officer, said the company plans to open 24 to 27 stores in 2012, with many openings taking place in the Midwest.

“It’s just exploding,” Mr. Mackey said of the Midwest.

But that wasn’t always the case, he said. Openings in Lincoln Park, Ill., Ann Arbor, Mich., and St. Paul, Minn., struggled out of the gate. Thoughts were that the Midwest may not be a good fit for Whole Foods.
“That has really changed,” he said. “We are just blowing and going in the Midwest.”

Now, Mr. Mackey said Minneapolis has turned into a “great market” and Chicago a “phenomenal” one.
“We think the Midwest might end up being our largest geographical region over the next six or seven years, certainly the fastest growing,” he said.

Whole Foods also is exploring opportunities to expand beyond the United States, and even though the company currently has stores in Canada and the United Kingdom Mr. Mackey downplayed any significant international growth.

“The big learning we’ve had about international markets is you basically start over again from scratch on your supply chain,” he said. “If you go open a supermarket like Whole Foods you have 30,000 to 40,000 s.k.u.s (stock-keeping units) and you can’t just take the supply chain you have in the United States and transfer it, so you have to almost start over from scratch.”

With that in mind, he said Whole Foods will continue to expand internationally, but it will be more “a gradual creep.”

“I’m sure this decade we will open up in a fourth country, but there’s not going to be any big Whole Foods Markets marching across the world,” he said.

Mr. Mackey did say that Canada could be a billion dollar category for Whole Foods, and the company plans “to grow stores in that country tremendously.”

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