The Wall Street Journal reports that Whole Foods is about to break ground on a new store - in downtown Detroit, a city with ongoing financial troubles and neighborhoods that could serve as a the poster child for urban blight.
According to the story, “An unusual mix of business factors—some data driven, some instinctive, some unique to urban development—prompted Whole Foods to take this leap. And a leap it is. Detroit remains one of America's hardest hit urban centers. Since the 1950s, more than half its population has taken flight. Those abandoned homes seem to be everywhere. The city is now in another budget crisis.
“Detroit's road to arugula also runs through plenty of resentment from local grocers, who see Whole Foods as unfair competition and a fancy national chain extracting special benefits from indulgent officials.”
One of the attractions of Detroit, the story says, is that there are “more than 800 community gardens using some of that space to grow vegetables and fruit for home use.” In addition, there is “the city's bustling Eastern Market, one of the oldest and biggest farmers markets in the country. It draws in produce from throughout the region and sells it to supermarkets and restaurants. Up to 40,000 people shop at its Saturday Market. The new Whole Foods plans to buy there as well.”
And so, Whole Foods thinks that there is an appetite in Detroit for its kind of store. And, it says it believes it can be profitable there.
According to the story, “An unusual mix of business factors—some data driven, some instinctive, some unique to urban development—prompted Whole Foods to take this leap. And a leap it is. Detroit remains one of America's hardest hit urban centers. Since the 1950s, more than half its population has taken flight. Those abandoned homes seem to be everywhere. The city is now in another budget crisis.
“Detroit's road to arugula also runs through plenty of resentment from local grocers, who see Whole Foods as unfair competition and a fancy national chain extracting special benefits from indulgent officials.”
One of the attractions of Detroit, the story says, is that there are “more than 800 community gardens using some of that space to grow vegetables and fruit for home use.” In addition, there is “the city's bustling Eastern Market, one of the oldest and biggest farmers markets in the country. It draws in produce from throughout the region and sells it to supermarkets and restaurants. Up to 40,000 people shop at its Saturday Market. The new Whole Foods plans to buy there as well.”
And so, Whole Foods thinks that there is an appetite in Detroit for its kind of store. And, it says it believes it can be profitable there.
- KC's View:
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At best, this is a gamble. At worst, it could be a disaster of epic proportions.
I have no idea which it will be. Maybe they can make it work ... perhaps they have a format in mind that won’t be quite as up-market as many of the ones they operate.
There is, however, one thing of which I am sure - that Whole Foods, no matter what they bring to the neighborhood, ought not get tax advantages that existing retailers with a long-term commitment to the community don’t get. That just doesn’t seem fair...especially since we are talking about a very profitable retailer here.
