U.S. Whole Foods Supersizes in London, Next Europe

Whole Foods Market, the world's largest organic and natural foods chain, opens its first store outside North America in London on Wednesday and plans hundreds more in Britain and across Europe.

Britain's largest supermarket at 80,000 square feet, the store is located in a landmark former department store building on upmarket Kensington High Street. It is the largest of the chain's nearly 200 stores.

Co-President Walter Robb said Austin, Texas-based Whole Foods was coming "humbly" to Britain, where it saw "tremendous potential."

"We're obviously not here to do one store. We have plans for the U.K. and the continent," he told Reuters at the launch party on Tuesday for one of the most anticipated store openings in London this year.

"We're saying by 2010 we expect we can have 300 stores in the U.S., and the U.K. and Europe are around the same size market.

Maybe we could have something similar here."

Whole Foods' opening coincides with unprecedented demand for organic and natural foods. Recent research showed that more than 60% of British shoppers buy at least one organic item a week.

The store recalls the chains' well-known Whole Foods outlet at Manhattan's Columbus Circle and provides the gastronomic spectacle that made it the world leader.

It sells fresh fish, vegetables, yoga mats, body lotion and peanut butter you can grind at the store without artificial sweeteners, colorings, additives or preservatives.

But there is a distinct London vibe to the interior, which includes a pub and a DJ on the second of its three floors alongside eateries serving seafood, pizza, ice cream and meze.

Expansion Plans

Robb declined to give specifics for the expansion plans in Britain but drew a parallel with California, which is roughly the same size and where it has 40 stores.

Real estate opportunities are already starting to surface, and while Whole Foods is looking simultaneously in Europe, Robb expected it would be more logical to "pop two or three" stores out in Britain before expanding there.

"It takes about a year to open a store," he added.

Founded 27 years ago by Texan John Mackey, a Birkenstock-wearing advocate of natural foods, Whole Foods now has 194 stores in North America and Britain.

Some analysts estimate that the London store could rack up 50 million to 60 million pounds ($99-$119 million) in sales a year. Robb would not be drawn on whether that matched his long-term view but said he had "substantial expectations."

What is certain is that Whole Foods will face more competition for the organic pound in Britain than in the United States.

Verdict Research analyst Daniel Lucht says success for Whole Foods in London will ride on whether it becomes a shopping and tourist destination. He says Londoners are unlikely to use it for everyday items, which they can already get elsewhere.

British chains Tesco, J. Sainsbury and Wal-Mart Stores' unit Asda as well as premium chains Marks & Spencer and Waitrose already boast thousands of organic products at prices often cheaper than at Whole Foods, which some U.S. shoppers jokingly dub "Whole Pay Check."

Just one block away from the Whole Foods' London store, Marks & Spencer has recently opened a new food hall, advertising food that is "ethically sourced."