Lund Food Holdings is considering tearing down its existing Byerly's on France Avenue and building a new store on the spot as competition heats up.

The Byerly's at 7171 France Av. S. near Southdale, is just a few blocks from a new Whole Foods natural grocery slated to open in 2012 on France Avenue S. in Centennial Lakes Plaza. The rival supermarket chains share similar upscale demographics and Whole Foods Market Inc., based in Austin, Texas, is expanding in the Twin Cities.

Aaron Sorenson, spokesman for Edina-based Lund Food Holdings, which owns Byerly's, said changes had been considered for some time, and it wasn't a direct reaction to Whole Foods moving in.

"We certainly have a priority list for making updates and renovations for our store," he said. "The Byerly's in Edina is now at the top of our priority list."

Sorenson said it's too early to discuss what a new store might look like or whether the corporation is considering a higher-density development. The current Byerly's is about 59,000 square feet, not including parking, and has a Big Bowl Chinese Express and Caribou Coffee, among other services. Property records show it was built in 1972 and that altogether, Lund Food Holdings controls about 295,594 square feet, or nearly 7 acres, on that corner of France Avenue and Hazelton Road.

Planners at the city of Edina said the grocer hasn't submitted any applications or plans for the spot.

Meanwhile, the new 36,000-square-foot Whole Foods is slated to go into the spot currently occupied by Storables in Centennial Lakes Plaza at 7501 France Ave. Pending city approval, the store would open sometime in 2012. Construction will probably start in the spring if it's approved, said Terese Reiling, a vice president at Welsh Cos., which handles leasing for the shopping center.

Reiling said she didn't know anything about plans for the nearby Byerly's but said the company is smart to be thinking larger.

"They are sitting on a really prime piece of real estate," Reiling said. "Why not optimize it?"

Dick Grones, a retail veteran and principal at Cambridge Commercial Realty, said Byerly's has made good adjustments to compete in the organic food segment.

Whole Foods is also opening a store in Minnetonka near Ridgedale next year, not far from another Byerly's. That Whole Foods will be about 32,000 square feet and will be in a former Circuit City at 1001 Plymouth Road, across Interstate 394 from Ridgedale Center. The stores will be the grocer's third and fourth in the Twin Cities. Both will have cafes and will be brighter and more colorful than earlier stores, said Whole Foods spokeswoman Kate Klotz.

Klotz said the company, which operates about 300 stores in North America and the United Kingdom, has stepped up expansion plans.

"We do think the Twin Cities is underserved when it comes to customers looking for natural and organic high-quality products," Klotz said.

Jennifer Bjorhus • 612-673-4683