Whole Foods’ plans for Basalt remain, well, whole
August 20, 2008
BASALT ” Whole Foods Market remains bullish on Basalt even though a weak national economy and soaring grocery prices have taken a bite out of the chain’s expansion plans.
Whole Foods announced earlier this month that it will scale back ambitious growth goals for 2009.
“The company terminated five leases in development totaling approximately 244,000 square feet for stores scheduled to open in fiscal year 2009 and beyond,” Whole Foods said in a third quarter report to investors. The company also said it decreased the size of several stores in development by an average of 9,000 square feet each.
Neither decision affects plans for the Basalt store, according to Ron Megahan, vice president of design and development for Whole Foods Market’s Rocky Mountain region. Construction remains on track for a 44,000-square-foot store, he said.
“Basalt is a great community, and we’re looking forward to being part of it,” Megahan said.
Joseph Freed and Associates, a Chicago real estate development firm which owns the Willits Town Center property in Basalt, broke ground in June on the Whole Foods site. Crews are working on the foundation and basement parking garage. The development firm is obligated by contract to complete the shell of the building by June 2009. The grocery chain’s own crew will finish work on the interior and exterior.
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Megahan said it will take up to six months to open the market once Joseph Freed and Associates hands over the shell. That could delay the opening until early 2010, but he is hopeful that work will progress quickly enough for a fall 2009 opening. It the developer hands over the shell sooner than next June, Whole Foods can start its part of the job sooner.
Tim Belinski, vice president of development for Joseph Freed and Associates, wasn’t available for comment Tuesday.
Terms of the deal between Whole Foods and the developer are private, so it is unknown what penalties would be levied if the contract isn’t honored by one party or the other.
Megahan and other company officials wouldn’t explain why Whole Foods decided to proceed with plans to develop some stores while scrapping or downsizing proposed stores in other markets. In other words, why Basalt? Megahan said simply that the company believes there is high demand for the natural and organic food store in the Roaring Fork Valley.
Even after scaling back development, Whole Foods still has big plans for growth. The company’s website showed there were plans to develop 81 stores across the country as of July.
The Basalt store will be the chain’s first in a mountain resort; the Roaring Fork Valley is one of the smallest markets the chain will serve. Megahan said the 44,000-square-foot store in Basalt qualifies as a medium-sized market among those the chain is developing.
The chain’s ongoing expansion comes at a time when many people are seeking lower-priced alternatives when grocery shopping. Rising fuel prices have driven up the cost to produce and transport food. Whole Foods is known more for quality rather than low prices.
The chain’s same-store sales growth slowed to 2.6 percent in the third quarter, after a consistent string of double-digit growth. The company’s stock price has plummeted 57 percent in the last year to $19.43 a share as of Monday.