Whole Foods Plans Big Mall Store Opening

Discussion
Aug 05, 2005
George Anderson

By George Anderson

“No matter where you go, there you are.” – Buckaroo Bonzai

Traditional department store operators such as Sears and J.C. Penney are looking to build sales outside of malls and, increasingly, retailers who have made their business outside
of malls are moving into them.

The most recent example is the announcement that Whole Foods plans to open a 77,000 square-foot store in the Bergen Mall in Paramus, New Jersey. When construction on the store
is completed, it will be the largest Whole Foods unit operating in the state.

Whole Foods joins Target as the second non-traditional mall retailer planning to take up residence in the facility located on Route 4 in affluent Bergen County.

According to a report in the Bergen Record, Vornado Realty Trust, which purchased the mall in 2003, will rename it Bergen Town Center and expand it by 200,000 square feet.
The $102 million plans call for a 1,570-car, five-level parking garage and nine stand-alone buildings.

Moderator’s Comment: How does the performance of mall-based stores for retailers not normally associated with malls compare to stand-alone locations?

– George Anderson – Moderator

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9 Comments on "Whole Foods Plans Big Mall Store Opening"


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Mark Burr
Guest
15 years 6 months ago

Malls are part of the changing landscape today. They aren’t what they used to be and they aren’t what they are going to be. The likelihood that malls will have different types of anchor stores is great. I also don’t consider Whole Foods to be like any other supermarket. While similar, to the consumer, I believe that they are considered ‘different.’

This will be an interesting one to watch. Old perceptions may be quickly replaced by a new reality for malls.

Jerry Gelsomino
Guest
15 years 6 months ago

As we look at the retail landscape today, it can be stated that retailers are simply playing a game of musical chairs. Customers are looking for something different in the place and the way they shop. In response, mall leasing agents are ready to give them what they want.

However, it is doubtful that the leases for new mall tenants can replace what department or specialty store paid. So, therefore, can the customer expect to see fewer amenities in the malls? Do free-standing stores as a destination offer a better economic base to provide amenities and entertainment?

M. Jericho Banks PhD
Guest
M. Jericho Banks PhD
15 years 6 months ago

Speaking from a supermarket perspective, nothing compares to the zest and interest a free-standing store can generate: Sidewalk sales, parking-lot events and demonstrations, radio remote broadcasts, signing and displays, etc. Further, free-standing stores that require multiple daily deliveries from a host of suppliers can accommodate delivery trucks without impeding or inconveniencing customers. Veteran shoppers can also gauge whether to shop now or return later to a free-standing store based on the number of cars in the lot.

With nothing but intuition to go on, I can’t see a mall-based supermarket performing nearly as well as a comparable, free-standing store.

Rick Moss
Guest
15 years 6 months ago

Channeling Yogi Berra, I’d say — nobody will go there. It’s too crowded. I live about 15 minutes from this mall and avoid it like the plague on Saturdays. The area is a maelstrom of activity, with numerous enclosed malls and strip malls, creating a huge draw from all over North Jersey and Manhattan. It’s traffic hell and a textbook case of poor commercial planning. In contrast, Trader Joe’s is positioned in more out-of-the-way strip malls that offer easy in/out access. For those living in Bergen County who have been awaiting a convenient Whole Foods location, I’d imagine this is a big disappointment.

Ron Margulis
Guest
15 years 6 months ago

Warren’s got the right idea. Situating retail stores still remains about location. Location in terms of convenience and location in terms of demographics. The location of the Whole Foods store in question is positive on both accounts, although a little less so in terms of convenience as Route 4 is one of the more highly traveled roads in northern New Jersey. The demographics are excellent in the area — Bergen County is one of the most affluent in the country.

Mark Barnhouse
Guest
Mark Barnhouse
15 years 6 months ago

Whole Foods will succeed brilliantly here. They have consistently shown great imagination and foresight in choosing locations, and Bergen Town Center will be no exception. Technically, though, this isn’t their first “mall” location–Time Warner Center on Columbus Circle in Manhattan is a mall, and that Whole Foods is the largest grocery store in the borough.

Do grocery stores belong in malls? I say yes, as long as they’re of the same caliber and attract the same kind of consumers as a mall’s department store anchors. Given that newer, larger Whole Foods stores are starting to feature restaurants with table service, and ever-more interesting ways of merchandising food, they’ll be right at home.

Conventional grocery stores, on the other hand, do not belong in a mall, unless it’s an off-price mall, or a mall that has tried everything else and failed. Super Targets, on the other hand, can fit into more mall locations due to their designer-oriented general merchandise selection.

Warren Thayer
Guest
15 years 6 months ago

I think location, close-in parking and ease of access will have more to do with it than whether it’s in a mall or not. I’ve never been a big fan of supers in malls, although I’ve seen a few in Mexico City that worked beautifully, with several layers of parking directly below the stores. Many malls I’ve seen here in the U.S. leave you parking some distance away, dodging cars, etc., and I don’t see that as conducive to the supermarket shopping experience. But of course Whole Foods does a phenomenal job with its ready-prepared meals, and could become a real destination for that for people making mall trips. Malls also of course bring ready-made traffic. So I figure it all balances out, and don’t see major advantage or disadvantage to the mall location.

David Livingston
Guest
15 years 6 months ago

I find that mall-based stores for retailers not normally associated with malls do not perform as well as their typical stand-alone stores. I think it comes down to the fact that mall based stores are more inconvenient and many have changing demographics retailers do not find desirable. Still, sometimes the mall property is the best bargain and possibly only real estate option. I’ve seen Wal-Mart go into a few malls and even though these Wal-Marts were below average (for a Wal-Mart), they still dominated the competition in the area. We had Pick ‘N Save in Milwaukee open a store at a rehabbed mall in a blighted inner city area. It’s one of their worst performing stores with regards to sales, but its by far the best supermarket option in the area. It’s done better than anyone expected. As long as the competition is weak, sometimes having the best location isn’t needed.

Mark Lilien
Guest
15 years 6 months ago

I am very familiar with that mall. It is well-located in one of the wealthiest counties in America. Whole Foods’ sales will be outstanding, due to the demographics as well as the dominant assortment implied by the store’s large size. Furthermore, it has no significant competition in the area.

“Big Box” stores are often located near malls (as “snuggle-up” locations or “on the pad,” in the parking lot) instead of inside them, for several reasons:

a. To minimize rents, since mall rents (including “common charges”) are often higher than elsewhere

b. To maximize store identity, since “free standers” are often more visible than in-mall locations

The store will be particularly successful if it has an entrance open to the outside, and stays open much longer hours than the mall. Due to very strong blue laws, most nonfood retailing in Bergen County is banned on Sundays.

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