Whole Foods: our average store does $1,000 per square foot
Publish Date: August 01, 2014
Whole Foods said same-store sales grew by 3.9 percent during its fiscal third quarter (ended July 6). Total sales grew by 10 percent, to $3.4 billion. Weekly sales per store average $736,000, translating to about $1,000 per gross square foot. The retailer operates nearly 400 stores now and has plans to cross the 500-store mark by 2017, with an ultimate goal of 1,200. Whole Foods signed leases for 11 new stores, including two relocations.
Throughout the next 12 months, the chain will also renovate approximately 70 percent of its stores that are more than 10 years old, co-CEO Walter Robb said on the retailer’s earnings call. “These refreshes will range in scale from decor updates, to adding and remodeling venues, to full-store remodels.”
Whole Foods will also try to lower its prices to attract a broader swath of consumers, he added. The chain’s gross profit margin is currently 35.7 percent, leaving a lot of room to lower prices, he said. “We are not suggesting a race to the bottom, but rather a thoughtful, strategic, surgical approach to improve our relative value positioning,” he said. Over the next several years, that gross profit margin could lower to 35 percent, he added.
The retailer is also launching its first national marketing campaign this fall. “With fewer than 400 stores and a marketing spend of less than 1 percent of sales, it’s impressive how widely recognized the Whole Foods Market brand is,” Robb said.
Whole Foods is also expanding its shop-from-home and delivery services. “First, we are expanding our reach to customers outside the stores,” Robb said. “Through strategic partnerships, we will offer home delivery and customer pickup in 12 to 15 major markets and launch our first online subscription club by calendar year end. Next year, we expect to offer direct ship in several key categories.”