DETROIT — Whole Foods Market last week opened an inner-city store here that is a smaller unit than the chain’s norm, with lower prices and a larger selection of private-label items and frozen and prepackaged foods designed to appeal to budget-conscious shoppers.
Similar stores are planned for New Orleans and the South Side of Chicago, according to an interview John Mackey, co-chief executive officer, gave to Adweek magazine.
Whole Foods has reportedly been offering classes in Detroit-area community centers about how to shop most effectively at its stores, the article said.
The Detroit store is a 21,000-square-foot unit that includes a mezzanine on the second level.
Scott Van Winkle, an analyst with Cannacord Genuity, Boston, told SN the store’s offering is tailored to the local community the same way the selection would be adjusted to Whole Foods locations in more upscale areas.
“This kind of store expands Whole Foods’ market opportunities,” he said. “Adjusting the assortment does not make it radically different than the way Whole Foods would adjust the offering in any city.”
A National Public Radio report on the store’s opening last week noted that while about half of the Midtown neighborhood’s residents live in poverty, the area also is home to several businesses and to Wayne State University, which attract higher-income workers from suburban areas during the weekdays in particular.
According to an article in the Wall Street Journal, the store, which has a 25-year lease, was financed in part through $5.8 million in state and local grants and the sale of tax credits.
The Detroit Economic Growth Corp. said in a report early this year that it assisted in financing the store through its “Green Grocer Project” that seeks to increase the availability of fresh foods in underserved neighborhoods and “strengthen the grocery economy” in the city. Other projects supported by the GGP include funding for projects at several independent supermarkets and assistance for two Meijer stores that are planned for the city.
Meanwhile construction began last month on another small-format Whole Foods store in New Orleans that will take advantage of financing to bring supermarkets to underserved areas. The city’s Fresh Food Retailer Initiative provided a $1 million loan to the project’s developer, and the New Orleans Redevelopment Authority also contributed $900,000.
Whole Foods was not available for comment last week.
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