Whole Foods vs. A&P

Aug. 16, 2010

After a period during which it slowed new-store growth to invest in price, Austin, Texas-based Whole Foods Market (and its new investment partner, Los Angeles-based Leonard Green & Partners) expect to open 17 new stores in 2011 and 19 in 2012, compared with 15 stores opened last year and 15 more expected this year, reports Supermarket News. Sites include San Francisco; Boise, Idaho; Minneapolis; and Washington D.C.; plus two in Austin.

After a period during which it slowed new-store growth to invest in price, Austin, Texas-based Whole Foods Market (and its new investment partner, Los Angeles-based Leonard Green & Partners) expect to open 17 new stores in 2011 and 19 in 2012, compared with 15 stores opened last year and 15 more expected this year, reports Supermarket News. Sites include San Francisco; Boise, Idaho; Minneapolis; and Washington D.C.; plus two in Austin. The retailer is also expanding in Canada, where it recently reviewed "several" markets and signed deals for "a couple" of new stores, and it is checking out more opportunities in the UK.

"As long as we can get good stores, we are going to open as many as we can," John Mackey, co-chief executive officer, told analysts last week during a conference call. "We're sort of bullish and optimistic about our future potential growth. We have the capital for it, our balance sheet has been renewed, we've got the infrastructure in place and we have the leadership in place. We can grow faster and intend to grow faster."

Andrew Wolf, managing director at BB&T Capital Markets, Richmond, Va., said, "Top-line momentum has been due to a substantially improved value image, coupled with a relatively more upbeat demographic," with independent polling indicating that upscale shoppers are more confident and likely to spend more than average consumers.

Over at Montvale, N.J.-based A&P, CEO Ron Marshall, who joined the company in February, has left, and Sam Martin, most recently COO of Office Max succeeds him. A&P will close 25 stores as it begins the implementation of its newly announced turnaround plan expected to be completed during the fiscal third quarter, which begins in September.  "While this was a very difficult decision that will unfortunately impact some of our customers, partners, communities and employees, these actions are absolutely necessary to strengthen A&P's operating foundation and improve our performance going forward," said Martin in a statement.

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