Whole Foods opens first-ever store in Detroit

[KevinFromTexas]

http://www.statesman.com/news/busine...detroit/nYCg7/

Posted: 1:23 p.m. Wednesday, June 5, 2013
Whole Foods opens first-ever store in Detroit

By Brian Gaar
American-Statesman Staff

Stretching into the type of market it hasn’t historically served, Whole Foods Market opened its first-ever store in recession-scarred Detroit on Wednesday.

While Whole Foods has been in Michigan cities like Ann Arbor for years, this was the first store within the city limits of Detroit, which has been hit hard by the downturn.

[LMich]

While this is certainly newsworthy as it's their first store in a lower-income inner-city location, Ann Arbor isn't the only location in Southeast Michigan where they are located. There are already three Metro Detroit locations (Troy, Rochester Hills, and West Bloomfield). The reporting on this I've seen seems to at least imply that this company is new to the area, and they really aren't. Detroiters now have an option closer to home instead having to drive to the suburbs, but they've been patronizing Whole Foods for years, now.

[uaarkson]

Can Detroit's residents even afford to shop at Whole Foods?

[Cleveland Brown]

Originally Posted by uaarkson

Can Detroit's residents even afford to shop at Whole Foods?

Many surely can, especially those living in the new apartments and condos that are selling fast in the downtown/midtown area. It's not like Whole Foods opened in one of Detroit's declining and dangerous neighborhoods. It opened in midtown, across from the Detroit Medical Center and near Wayne State in a neighborhood that has had constant development for around 30 years.

[Cleveland Brown]

And to add the notion that Detroit lacks retail because Detroiters are too poor to shop at many stores is silly. Detroit may lack retail for a host of reasons, high taxes, shrinkage, land costs, parking, etc, but Detroiters have, over the years, simply ventured across suburban boundaries where malls and retail have ringed the city for decades. Three malls (Northland, Eastland, and Fairlane) are all within a mile of city limits and largely cater to city residents. Moreover, city residents can be found to frequent several regular and upscale suburban grocery and retail stores throughout the metro area.

Being forced to go to the suburbs to shop has been the bane of many working, middle, and upper-class (they still exist within city limits) for as long as I can remember, especially when comparable cities still have decent regional shopping options within city limits.

[KevinFromTexas]

I figured there was already one in the suburbs. It's similar in San Antonio. The inner part of town mostly has smaller older grocery stores that can't be expanded, while the suburbs are getting the bigger newer concepts. That's kind of bad, though, that people are having to drive to the suburbs for groceries. It sort of defeats the purpose of wanting to be in the city if you still need to go to the suburbs. It's usually the other way around.

[Xing]

Well it's obvious it took awhile because of a stigma, but investigate and you can probably find a lot of places a whole foods could work in.

[The ATX]

Originally Posted by LMich

While this is certainly newsworthy as it's their first store in a lower-income inner-city location, Ann Arbor isn't the only location in Southeast Michigan where they are located. There are already three Metro Detroit locations (Troy, Rochester Hills, and West Bloomfield). The reporting on this I've seen seems to at least imply that this company is new to the area, and they really aren't. Detroiters now have an option closer to home instead having to drive to the suburbs, but they've been patronizing Whole Foods for years, now.

I don't think the news about the Detroit store has anything to do with the fact that there are three stores in the CSA. It's all about Detroit proper, and it is fantastic news and will encourage people to move into Midtown.

[Rizzo]

Midtown is a key word. It's really the first large grocery chain to exist in a central location in the city. I was tired of all the fanfare when people celebrated the Meijer on 8 Mile. Great! some miles shaved for those that own a car. For those that don't...enjoy the long bus ride as you always have.

This is also part of the reason I've hammered my viewpoint endlessly on the other Detroit website. The reason Woodward needs light rail cutting N-S across the city is to create an express spine of transit that's frequent and reliable....a trunk line to be more appropriate. E-W bus lines would be secondary, but at least much of the journey would be convenient with minimal stops.

Such a system gives downtown and midtown validity as places to shop and do business instead of the suburbs where Detroiter's shop. A decentralized model of job centers and shopping is absolutely devastating on the functionality of a city that has a high population of low income residents.

[hudkina]

Originally Posted by uaarkson

Can Detroit's residents even afford to shop at Whole Foods?

I'm sure Whole Foods is perfectly fine with the 36,000 households in the city with incomes above $75,000.

[LMich]

Originally Posted by hudkina

I'm sure Whole Foods is perfectly fine with the 36,000 households in the city with incomes above $75,000.

I never quite get these comments. These are businesses we're talking about. They aren't setting up shop simply because Detroit begged them to or simply because they are doing the city a favor; they are setting up shop first and foremost because they have carefully weighed that they can make money in the city.

This store could very well do poorly and end up closing. That is certainly a possibility. I can imagine a scenario in which they don't peel off as many city residents and city workers from their suburban stores to patronize their urban location as they thought they would for whatever reason. But corporate obviously did the same thing they do when determining expansion (demographic radii, etc...) that they do for everywhere else.

This really isn't even to mention that poor residents - who while I'm sure Whole Foods would love to have, but not exactly who the store is marketed to - are often gouged for food in underserved, inner-city areas to begin with. So, if Whole Foods runs a little on the high side, they'll be paying similar prices, anyway, but for drastically better quality.

[Rizzo]

Maybe someday a place like Roundy's-Mariano's will move into the Michigan market. It's currently an unfilled niche. You have places like Kroger that pretty much offer a no-frills experience then step right up to Whole foods. There's nothing in Michigan I'm aware of that's in between. It's nice to have a luxury experience but pay low prices. I like that I can have a freshly prepared gourmet salmon dinner for just a $1 more than a meal at McDonald's.

[ardecila]

Originally Posted by LMich

I never quite get these comments. These are businesses we're talking about. They aren't setting up shop simply because Detroit begged them to or simply because they are doing the city a favor; they are setting up shop first and foremost because they have carefully weighed that they can make money in the city.

Maybe so. I'm curious about what changes in operating practice Whole Foods is making for these mid-range urban stores. Whole Foods locations tend to vary quite a bit; the prepared food options certainly do, and some places may have a large beer and wine section, others may focus on cheeses, baked goods, meat/seafood, etc. I think it depends what the store planners think will work in a particular location. Is Whole Foods concentrating on the basics in the Midtown Detroit location? They're probably not using the same strategy they use in a place like Troy.

Whole Foods has similarly announced plans to open in a blighted neighborhood in New Orleans. The immediate environs of the store are unquestionably blighted but the broader neighborhood will soon see two massive hospitals open and lots of ancillary development.

[Rizzo]

The DMC is right next door...plus Wayne State. Whole foods could probably survive alone from business from those places. Any customers from elsewhere in the city are incidental benefits for the store.

[Cleveland Brown]

Originally Posted by ardecila

Is Whole Foods concentrating on the basics in the Midtown Detroit location? They're probably not using the same strategy they use in a place like Troy.

I hope Whole Foods isn't copying the Troy store strategy. That store is the worst I have ever visited in the entire Whole Foods chain and is too small with a limited selection, although I believe it was the first store in Michigan.

[hudkina]

Originally Posted by Hayward

Maybe someday a place like Roundy's-Mariano's will move into the Michigan market. It's currently an unfilled niche. You have places like Kroger that pretty much offer a no-frills experience then step right up to Whole foods.

Kroger is more or less the mid-market grocery store. The real no-frills experience can be found in places like Save-A-Lot or Aldi. Kroger is a luxury in comparison.

[Rizzo]

I have no doubt that Krogers would be shuttered if Mariano's ever moves in. When you offer premium quality stuff for reasonable prices, expanded prepared meals, in house dining, etc you'll win customers. Then there's all the side benefits like store atmosphere, live music, cooking classes, complimentary samples and beverages. Kroger would have to overhaul the chain much like Dominick's and Jewel have to do in Chicago to stay alive. Wouldn't be surprised if Meijer just buys them up since they already control distribution.

[hudkina]

I don't think typical middle-class grocery shoppers are looking for cooking classes, live music, etc. I think as long as the basics are covered (fresh produce, fresh meat/deli, reasonable prices, easy check-out, etc.) most people will stick with the traditional format. Granted, I'm sure there is a market for the type of experience you describe, but it's definitely more of a niche.

[Rizzo]

Originally Posted by hudkina

I don't think typical middle-class grocery shoppers are looking for cooking classes, live music, etc. I think as long as the basics are covered (fresh produce, fresh meat/deli, reasonable prices, easy check-out, etc.) most people will stick with the traditional format. Granted, I'm sure there is a market for the type of experience you describe, but it's definitely more of a niche.

Actually there's market research that contradicts that. If at any point another grocer enters the market, elevates the experience and offerings and not the prices, customers will follow. Kroger is fortunate they can stay competitive even with places stealing some market share like Target and Walmart. Of course as you point out, these may be a separate market. But people will shop where it's convenient, and in many instances some place new.

The other problem is it only takes one bad produce experience for customers to experiment elsewhere. You'd be surprised how little store loyalty people have for big chain grocers unless it some local produce or meat shop and they want to support that establishment.

As far as the cooking classes and live music, don't be so quick to assume! Young and old folks go. That recent college grad may want to learn how to cook a gourmet meal instead of microwave. And seniors show up to hone some of their skills or just to be social.

[hudkina]

I'm not denying there's a niche market for such things, but again it's a niche market. The vast majority of people have no real interest in cooking classes. And market research isn't necessarily an accurate gauge. What people say and what people do are often two very different things. Even if 60% of shoppers say they'd be interested in taking cooking classes, I'd bet that less than 10% of shoppers would ever actually do it. And even if shoppers say they might prefer a grocery store with live music over a grocery store with recorded music, I'd bet that music isn't even in the "top 10" reasons why someone might choose a particular grocery store. (such things as location, price, store condition, selection, quality, etc. would absolutely trump background music.)