Whole Foods Eyes More UK Expansion--While Pittsburgh and Marin County Say MORE PLEASE

Implications: As reported in market research firm IGD's Retail Analysis, Whole Foods is set to sign leases for another London Store in the Canary Wharf area as well as a location in Birmingham.  Manchester is reportedly also on the radar.  Yet here at home as the chain integrates its new Wild Oats stores into the mix, more and more questions are being raised about its ability to translate enthusiasm and demand, and in some cases even signed leases, into actual stores. Whether this story is merely indicative of ongoing enthusiasm for a quality grocer in a retail landscape where most chains are dull and limited by the mechanisms of bureaucracies and slotting fees is not yet clear. But anecdotal indications suggest that ongoing efforts to build new stores in prime locations, quickly transform Wild Oats stores and grow overseas might be a bigger challenge than the store's PR statements indicate.

Analysis: Most notably the chain's failure to open a location it leased over a year ago in a former Albertson's in  uber-wealthy Marin, County, California, as well delays in the opening of its new location in Orange, Connecticut indicate problems.

Whether the Marin County effort was merely a tactical move to forestall Trader Joe's from moving closer to the chain's Mill Valley blockbuster is unclear.  Similarly we aren't sure what is delaying the Orange, Connecticut store, which from outward appearances looks ready to roll. Whether it is zoning delays or something from Whole Foods corporate, one would expect that the business development team would be moving faster than it is.

Further our ongoing analysis of its efforts in Westport, Connecticut which showed initial strong improvements in perishable and prepared foods departments are now shower less polished merchandising and service. 

While the overheard plan for a $5 million remodeling, is slated for August, the better than ever store to come, isn't even mentioned anywhere in the store.  Meanwhile, conversations with shoppers at the store reveal some of them are wondering what the big fuss about Whole Foods is about.  Once complete these shoppers will see something magical, but in the meantime are opportunities being lost in hedge-fund rich Westport, much like Marin County and elsewhere.

While current competitive challenges are still weak, with regional based Wegman's and Trader Joe's among the only clear strong challengers, increasing efforts from smaller regional super natural markets are growing as are the ongoing efforts from conventional markets to get their natural and organic ducks in a row.

Furthermore, we expect Target to start attracting many hard core natural shoppers with their continued expansion into the premium side of grocery both with low-priced branded offerings, as well as through continued efforts in the Archer Farms store brand and in the personal care department as well.

Things are heating up and the question to be seen is does Whole Foods have the resources to take advantage of its huge advantages before the competition catches up?