A new grocery store is coming to town, and the timing of it couldn't be better for real estate owners.
While other supermarket chains shutter stores, scale back on expansion plans or choose not to renew leases, Whole Foods is planting more stores across the U.S. The grocer has long been a favored tenant in the retail real estate world — being a traffic driver to shopping centers and always paying rent on time — and an acquisition by Amazon only made the Whole Foods name more popular.
Now, Whole Foods is looking to go after a lower-income household in creating stores that primarily carry less-expensive goods.
The Austin, Texas-based chain on Wednesday brought its first 365-branded store to the East Coast, in New York. The Brooklyn location, on the ground floor of a residential building, marks the seventh in the country. Sixteen stores are in the pipeline, according to its website.
Whole Foods' expansion plans are welcomed by an industry of real estate owners looking to fill vacated spaces along strip centers and even within malls. The retailer is known for being selective in choosing where to plant its stores (it has far fewer locations than Kroger or Albertsons), but it sees a bigger opportunity to tap the pockets of cost-conscious customers. This is just one of the reasons Whole Foods is looking to grow.
Unlike a traditional Whole Foods store, the 365 locations are smaller in size — 30,000 square feet, compared with 43,000 square feet on average — and target customers with a more curated selection of items from local vendors. The Brooklyn location, for example, will host a local juice bar and burger joint, among other restaurant options.