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The lanes were jammed with shoppers as Whole Foods opened its new store at the Shoppes at Arbor Lakes in Maple Grove on Wednesday.

Bruce Bisping • bbisping@startribune.com,

As part of the opening of the new store, local vendors were invited to set up booths outside Whole Foods in Maple Grove.

Bruce Bisping • bbisping@startribune.com,

The new Maple Grove location is the first Whole Foods store in the Twin Cities to have its own adjacent liquor store.

Bruce Bisping • bbisping@startribune.com,

Whole Foods boosts its presence in Twin Cities with new stores

  • Article by: Mike Hughlett
  • Star Tribune
  • July 17, 2013 - 9:02 PM

 

After years as a bit player in the Twin Cities, Whole Foods is in the midst of a building boom.

The nation’s largest natural and organic supermarket chain unveiled a new store Wednesday in Maple Grove and expects a downtown Minneapolis location to open in early fall. That would bring to six the number of Whole Foods markets in the Twin Cities, and grocery industry analysts say to look for more.

“They’ve set a goal of 1,000 [nationally] over the next decade,” said Ken Perkins, a stock analyst at Morningstar. Whole Foods currently has just over 350 stores, but it’s building out at least 30 new stores annually.

When it targets new locations, the company looks for “high incomes and highly educated people,” Perkins said. Relative to many other metro areas, the Twin Cities has both.

But it also offers more competition than some other markets, notably from local food cooperatives and upscale chains led by Lunds and Byerly’s.

Austin, Texas-based Whole Foods opened its first metro-area store at Grand and Fairview Avenues in St. Paul in 1995 and followed up with another in 1999 near Lake Calhoun in Minneapolis. But that was it until 2011, when Whole Foods opened a supermarket in Minnetonka, followed a year later by an Edina location.

Another Whole Foods outlet is planned as the ground-floor retail anchor for a $70 million downtown complex called 222 Hennepin, which will include luxury apartments. The store is scheduled to open in late September, said Dan Blackburn, Whole Foods’ executive coordinator of operations for Minnesota and Wisconsin.

Blackburn, a Pequot Lakes native who opened Whole Foods’ St. Paul store, said the company needed to focus on building out other metro areas — notably Chicago — after its initial two stores opened in the Twin Cities. “It just didn’t happen in Minnesota until lately.”

Blackburn said the Twin Cities market is “more complex” than some others. “Education from a consumer’s perspective is just outstanding [here].”

Whole Foods is one of the nation’s most prosperous supermarket chains, with strong sales growth over the past six quarters, said Jim Hertel, managing partner at supermarket consultant Willard Bishop.

Investors are certainly keen on the company. Whole Foods has a stock market valuation of $21 billion on annual sales of about $13 billion. Compare that with Eden Prairie-based Supervalu, a more conventional grocery retailer and owner of Cub Foods, which has annual revenue of $17 billion, but a market capitalization of only $1.74 billion.

With six stores, Whole Foods is still a relatively small player in the Twin Cities. Lunds and Byerly’s, which are owned by the same local company, together have around 20 stores, and they’re small compared with Twin Cities market leader Cub. Plus, Whole’s new stores are in highly competitive locations.

The new Maple Grove Whole Foods is just off Interstate 694 in the Shoppes at Arbor Lakes, a big retail development. “It has great visibility, and the demographics are awesome for us,” Blackburn said.

Like the Minnetonka and Edina locations, the Maple Grove store is between 37,000 and 38,000 square feet, Blackburn said. It is the first Whole Foods in the Twin Cities to feature its own adjacent liquor store, and also includes a gourmet coffee bar and children’s play area.

So where does Whole Foods go next in the Twin Cities? There’s speculation it might anchor an apartment project that Ryan Cos. has proposed for Snelling and Selby Avenues in St. Paul. But Blackburn couldn’t confirm that.

John Dean, a Twin Cities supermarket consultant, said he expects more action from Whole Foods on the east side of the Mississippi — such as Woodbury. Except for Whole Foods’ original Twin Cities store, “everything it’s built so far has been on the Minneapolis side of the river,” Dean said.

 

Mike Hughlett • 612-673-7003

 

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