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Organic Growth: Specialty grocers give developers plenty to chew onJanuary 24, 2014
Whole Foods rendering courtesy of Whole Foods.
New Grocery Development
(120,000 square feet)
Texas 114 and Dove Road
(22,000 square feet average)
6 immediate stores in DFW
2 in Tarrant County
(80,000 square feet average)
Up to 12 stores
14 current Locations
4 new stores in 2014
5 new stores in 2015
12 planned stores
A. Lee Graham
Specialty supermarkets are sprouting quicker than Sprouts, one of many businesses sinking its teeth into a growing market.
With 14 Dallas-Fort Worth stores – and several more on the horizon – Sprouts Farmers Market is not alone in spreading its edible inventory across the Metroplex.
“Even to the casual observer, it is apparent that the specialty grocers, plus H-E-B, Wal-Mart, Kroger and WinCo, are leading the grocery development frenzy,” said Stephen Coslik, chairman of the Woodmont Co., a commercial real estate development firm, speaking at the Jan. 16 Tarrant County Commercial Real Estate Forecast in Fort Worth.
Sharing that sentiment is Colleyville’s chief economic official.
“We’re definitely seeing that,” said Marty Wieder, economic development director for the Northeast Tarrant County city teeming with affluent young families, high-income residents and shoppers clamoring for niche foods – just a few qualities that Whole Foods Market seeks in site selection.
“Population density, a certain level of education – those are some things we look for,” said Karen Lukin, a spokeswoman with Austin-based Whole Foods, whose organic and gluten-free inventory has helped attract shoppers.
Organic offerings, while a comparatively small niche compared with other products at conventional supermarkets, represent a growing niche. In fact, such specialty goods give smaller retailers added oomph in the competition, according to First Research, an Austin-based market analysis firm.
Whole Foods Market, Sprouts, Market Street, Trader Joe’s and other more specialized grocers, while fewer and often smaller than the Tom Thumbs and Krogers of the supermarket world, feed growing customer demand for something different.
“My daughter is celiac[-sensitive], and when she comes home from college, she wants a specific kind of food,” Wieder said.
Such products help smaller companies compete among the nation’s 65,000 supermarkets, whose combined annual revenues total about $500 billion, according to First Research.
That’s a lot of organically grown cabbage.
When Whole Foods chose Colleyville for its second Tarrant County location – its first is in north Arlington – it selected a former Albertson’s location in the Village Park shopping center at Texas 26 and Glade Road. The 190,664-square-foot center has been re-branded as Colleyville Downs, and its hotly anticipated Whole Foods anchor is expected to open this summer.
“We feel like they’re a crown jewel for the center and a game changer for us,” Wieder said of Whole Foods. “They will bring traffic to the city from other communities. That was part of our strategy in reaching out to them.”
Determined to land a Whole Foods store, the Colleyville City Council last year agreed to give Centennial Real Estate Co., the Dallas-based project developer, $2.25 million from the city’s Tax Increment Financing district to help renovate the shopping center. The developer agreed to fund more than $18 million in additional renovations, Wieder said.
Whole Foods has long been rumored to be seeking a site in Fort Worth, with the latest talk centering on the Trademark’s Waterside development off Bryant Irvin Road.
Competitors promise new area storefronts of their own, with Fresh Market planning several area stores, for example.
Possibly increasing its presence in the Dallas-Fort Worth market is H.E. Butt Grocery Co. While divulging no specific game plan, H-E-B is considering a Dallas-Fort Worth rollout. The San Antonio-based company is better known for its grocery empire in central Texas. The chain currently has a location in Burleson.
“We’ve had our eye on Dallas-Fort Worth for almost 15 years,” said Leslie Sweet, H-E-B’s director of public affairs. “It’s a big decision for H-E-B, and we’re not at the point that we’ve made that decision.”
Still, the company has found success with its Central Market, a chief competitor of Whole Foods, whose aisles have found favor in Fort Worth, among other cities.
“It’s these types of grocers that really attract customers and are great news for revenue,” Wieder said.