A Whole new grocer: Whole Foods to open in Short Pump, joining a crowded market

Aug 31, 2008 (Richmond Times-Dispatch - McClatchy-Tribune News Service via COMTEX) -- WFMI | Quote | Chart | News | PowerRating -- Aug. 31--Whole Foods Market will open its first store in the Richmond area Wednesday in Short Pump.

For the past month, the natural-food grocer has been putting the finishing touches on the 60,000-square-foot store in West Broad Village.

Last week, most of the shelves were neatly stocked with row upon row of organic olive oil, hand-picked coffees and eco-friendly diapers. Workers were putting together the final pieces of the produce section -- a faux farmers market just inside the entrance.

Store manager Aaron Brook said the chain is coming to Richmond because there is a market for Whole Foods' wide assortment of organic and natural foods, vegetables and fruit, plus standard grocery items.

The Short Pump Whole Foods will feature a hot bar for freshly prepared meals, a gelato stand, two salad bars and a bakery offering pies and some breads. The store, which will employ 140, also will offer cooking classes.

Brook anticipates a strong opening. "We can feel there's a buzz out there," he said.

Whole Foods has eight stores in the state, seven in Northern Virginia and one in Charlottesville.

In the Richmond area, Whole Foods, which is trying to dispel its reputation as a high-priced grocer, comes into a competitive market at a time when shoppers are increasingly careful how they spend their money.

Jeffery W. Metzger, publisher of Food World, a trade publication, said that while Richmond is a good market for Whole Foods, it will be in an area already saturated with grocery stores.

Within a half-mile of Whole Foods are a Kroger, a Ukrop's and a Tom Leonard's Farmer's Market. A Trader Joe's, also a newcomer to the Richmond market, is scheduled to open Sept. 26 at the Short Pump Station shopping center about a quarter-mile away. The nearby Wal-Mart and Target also sell groceries.

All the grocery competitors face shoppers who increasingly are looking for value, Metzger said.

In a July survey, Columbus, Ohio-based TNS Retail Forward found that 20 percent of shoppers have adjusted their grocery shopping habits because of the economy. The survey found the hardest-hit were organicand natural-food stores -- Whole Foods' specialty.

Metzger says many shoppers are heading to nontraditional, lower-priced grocers such as Wal-Mart and Costco for their day-to-day grocery needs.

The TNS survey found that 24 percent of people are doing more shopping at discount grocers such as Save-A-Lot and ALDI, while 12 percent say they are shopping more at warehouse clubs and 23 percent are shopping more at Wal-Mart Supercenters.

But 26 percent of those surveyed said they are shopping less at natural-food markets such as Whole Foods.

The change in shopping habits has hit Whole Foods particularly hard.

The chain has seen its stock drop from a 52-week high of $53.65 to $18.49. Third-quarter results released this month show profit dropped to $33.9 million, down from $49 million during the same period last year.

John Mackey, chairman, chief executive officer and co-founder of Texas-based Whole Foods, said the chain remains strong.

"Our business has been highly successful, and we remain very bullish on our growth prospects," he said in a statement released with the earnings.

Still, he acknowledged, "the challenging economic environment appears to be negatively impacting our sales."

To compete, Metzger said, Whole Foods needs to emphasize sale prices and value items.

One of those value items is Whole Foods' line of 365 private-label products.

Store manager Brook says the line was designed to make the chain competitive.

Still, he said the chain's reputation as too expensive is not wholly accurate.

"It's a stigma," he said. "You put our products side-by-side [with competitors'] and we are equal or cheaper."

To battle what it calls the myth of higher prices, last week Whole Foods released a price comparison of nine items that were equally priced or cheaper than at competitors in four markets.

Clets Ong of Richmond said he finds Whole Foods' prices manageable.

He has shopped at stores in Massachusetts and Charlottesville.

"You just have to look for the right brands and the sales," he said. "They are there, and you will find them."

With the new store in Short Pump, Ong said most of his grocery shopping will be at Whole Foods because he tries to maintain a diet focused on natural food free of chemicals.

Some items are more expensive at Whole Foods, Ong acknowledged, but he said it is worth the extra money.

"I don't mind paying more for meat that's not been filled with chemicals," he said. "It's worth it to me."

Right now, he divides his shopping among Tom Leonard's, Wal-Mart and Ukrop's. He said he keeps to his diet by mixing his shopping between the stores, but it will be easier when all the products are under one roof.

"I am very excited about it finally opening," Ong said. "I've been waiting a long time."

Contact Louis Llovio at (804) 649-6348 or LLLovio@timesdispatch.com.

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