Whole Foods Market, the first national certified organic grocer, has established an aggressive goal to increase its store count, setting a target of tripling its portfolio of stores to a count of 1,000 over the next decade. The company reiterated the goal, along with discussion about expansion through acquisition and organic growth, in its most recent update on earnings.
There are currently 16 Whole Foods Market locations in the Washington area. The grocer has been known to employ stringent demographic requirements in selecting its locations, in particular seeking store locations in areas with a higher density of college-educated residents.
This is apparent in the population profile within the three-mile trade area of its existing locations, which exceeds the region’s average for educational attainment, income, growth and density.
However, the grocer’s newest proposed location in Prince George’s Riverdale Park, announced by Whole Foods Market the same year as the plans to rapidly multiply its store count, illustrates how the chain is eager to tap the strong demand for its offerings across more communities, and appears to reflect a broader set of site-selection criteria to meet its growth goal.
The demographic profile for the proposed store illustrates the more expansive metrics the grocer appears to be using to size up a new location. The percentage of residents with at least a four-year college degree within three miles of the proposed location, for example, is lower than areas where it has existing stores, (although the new retail development is just a short car ride down Route 1 from the University of Maryland’s main campus.) Other demographic indicators for the site, including household growth and median income, also indicate the broader range of locations the grocer believes its stores can compete and pull in shoppers.
All of these signs point to an organization that feels confident in a consumer adoption level that is no longer niche, but has gained a more broad-based mass consumer acceptance.
That confidence could play a critical factor to achieving its aggressive growth goals.
Erica Champion is a senior real estate economist for CoStar Group in Washington.