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Same-Store Sales Up 8.4 Percent at Whole Foods Market

Whole Foods Market reported its sixth consecutive quarter of same-store sales growth of 7.8 percent or higher on July 27.

by Terrie Ellerbee/associate editor

Whole Foods Market reported its sixth consecutive quarter of same-store sales growth of 7.8 percent or higher on July 27.

Same-store sales are up 8.5 percent year-to-date through the company’s third quarter, and up 9.5 percent early in its fourth quarter.

Though Whole Foods Market customers tend to be more affluent, Walter Robb, co-CEO, said the same-store sales momentum was due in part to the natural and organic grocer’s emphasis on value, which helped drive a 5 percent increase in transaction counts.

“We worked very hard over the last couple of years to successfully improve our price image, particularly in perishables, and we remain focused on maintaining our relative price positioning in the marketplace,” Robb said during the company’s earnings call for its third quarter of fiscal 2011.

However, higher prices directly led to an increase in basket size of 3 percent, which followed a 2 percent increase in the second quarter. Robb said Whole Foods Market is “selectively pass(ing) through some product increase and customers continue trading up.”

Its customers seem to have just the opposite mindset that Walmart’s shoppers do. Branded and organic sales are up, as are higher priced tiers in several discretionary categories, Robb said.

“We also saw strong increases in the $50-plus size baskets,” he said. “We are hopeful we can continue to strike the right balance between rising product costs in our retails based on our distribution network and our tools to manage value.”

Looking ahead, Whole Foods executives believe the company is well positioned in the current climate. The retailer sees “a new era of possibility…as customers increasingly embrace healthier lifestyles,” Robb said. He said that focus is “a big idea for this new generation…and we are leading it at a time when healthcare costs have never been higher. People are realizing that this is a way they can move forward. All of these are combining to give us a nice fit.”

During the second quarter, Whole Foods opened two California stores, one Connecticut store and a location in Houston. It has signed eight leases on stores averaging 30,000 s.f. since its second quarter earnings were released. They are in Arizona, California (2), Basalt, Colo., Detroit, South Carolina and Virginia Beach. Whole Foods also opened one store in the U.K.

The retailer signed 31 new leases over the past year and will open between 24 and 27 stores in fiscal 2012, and 28 to 32 new stores in fiscal 2013.

Whole Foods Market currently has more than 300 stores in 38 states. Robb said 1,000 stores is a “reasonable indication of our market opportunity in the United States.”

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