Still no expansion in store for Whole Foods after 6 years
Cleveland shoppers get bigger selections
May 6, 2008 4:00 AM
Bill Wade (no photo credit)
The 6-year-old Pittsburgh store on Centre Avenue.
Joshua Gunter/The Plain Dealer
Mediterranean whole, stuffed black bass in the fresh seafood section at the Cleveland Whole Foods store.
Joshua Gunter/The Plain Dealer
Shoppers browse the fresh produce at the second, smaller Cleveland-area store that Whole Foods acquired last year.
VWH Campbell Jr./Post-Gazette
The year-old Whole Foods in University Heights, Cleveland.
Pittsburgh's Whole Foods in the fall of 2002, when it opened.
By Teresa F. Lindeman Pittsburgh Post-Gazette
Almost six years ago, the Whole Foods Market that opened in East Liberty had Pittsburghers marveling that the natural and organic nirvana had arrived in the Steel City. Many parking lot headaches, mid-aisle tie-ups and a few flying elbows later, some are wondering why shoppers' loyalty hasn't been rewarded with a bigger and better store.
Officials of the grocery chain repeatedly have expressed interest in putting a second store here. They announced a South Hills location, but that plan fell through. They've discussed building a larger store in East Liberty, but nothing has come of that. They've discussed remodeling the existing location, but it remains pretty much the same.
And while Whole Foods continues to hold out hope for a new Pittsburgh area store -- "We are currently negotiating on some sites in Pittsburgh," said company spokeswoman Kristin Gross -- so far, nothing much has changed. Even if the company announced a second location today, it would take at least a year to open, said Ms. Gross.
"We've had some hang-ups, whether it's been with developers or lease deals. We haven't found what's best for us. We're holding out for the right spot," she said.
The situation could frustrate even what one industry consultant described as a "very loyal customer constituency." Especially if they happen to swing by the University Heights suburb of Cleveland, where a year-old, 43,400-square-foot store serves a similar demographic as the East Liberty location.
Just a two-hour drive away, it's possible to see some of the refinements and enhancements the Austin, Texas, chain has made since the 32,500-square-foot East Liberty location opened in fall 2002.
In Cleveland, shoppers bag their habanero peppers in a produce section with room for 14 rows of bananas, choose from 24 rows of prepared meats, 22 rows of meat cuts and 11 rows of handmade sausage at the butcher's shop, after they dine on Risotto Di Giorno ($9) at a trendy restaurant counter.
Here, the tight produce area has room for five rows of bananas. The cramped butcher's shop offers almost as much variety, but in smaller quantities. And forget about fitting in a trendy restaurant.
But wait, there's more, as one Cleveland customer noted last week. "Don't settle on anything yet," warned a tall, suited man who had come to the Cedar Road store with two friends and was strolling by the prepared foods/restaurant counter. "Because once you get to the other side..."
Across the store are rows of salad fixings, entree items and desserts that could be scooped for $7.99 a pound into containers for take-out or for eating at the large dining area just past the checkouts. Pittsburghers make do with about half the choices.
The contrasts don't stop there.
It's probably not fair to count the wine and beer shop with cases of sustainable reds and whites, as well as specialty shelves featuring bottles of 2004 Far Niente Cabernet Sauvignon for $126. Pennsylvania liquor laws are different from those in Ohio, where it's common for grocers to sell alcoholic beverages.
But Pittsburgh also doesn't have the spacious produce department that includes a cut flower shop staffed by an employee and a display of juices and prepared salads.
Also in Cleveland, chefs can choose from California ostrich eggs ($19.99 each), goose and duck eggs (two for $3), as well as a selection of chicken eggs ranging from a green-toned Ameraucana version (three for $1) to Amish-raised (four for $1). All are from cage-free birds, of course.
Cleveland's olive and antipasto bar with its 36 bins dwarfed the 21-bin version in the East Liberty store.
At the curved coffee bar counter in Cleveland with four wooden stools and bins filled with beans from exotic locales, an employee stood ready to serve. Tea drinkers could order a "straight fix" or a "fizzy fix," each $2.99 for 16 ounces. An "icy fix" cost $3.99. Pittsburghers use a self-serve coffee counter not far from the self-serve coffee bean aisle.
Then there's Cleveland's Osteria, an island restaurant counter attached to the prepared foods display. During the lunch hour, diners sat at tall wooden chairs and ordered either from the menu or specials on a chalkboard. A Whole Foods staffer in a white chef's jacket and black baseball cap prepared a $6 Pizette Caprese on a curvy white plate, drizzling oil and balsamic vinegar artistically.
"Over the past five years, across the country, we've really looked at what we can add to our stores," said Ms. Gross. Popular additions have included coffee bars, restaurant counters and prepared foods.
"It's a lot more, how would you say, customer-service oriented," said Kathy Varcelli, who operates a business on Chagrin Boulevard.
She happened to be shopping in the Cleveland area's second Whole Foods Market, a smaller store that's older than Pittsburgh's. The site came into the company last year as part of the acquisition of its Colorado-based rival Wild Oats.
Ms. Varcelli has shopped both Cleveland-area Whole Foods stores and liked the amenities found at the new one. She also appreciated having the choice of shopping in yet another natural and organic store, the Mustard Seed Market & Cafe in nearby Solon, which has a full-fledged restaurant.
Choices for those who want such products are more widely available in Pittsburgh, too, said Gayle Marco, an associate professor in the marketing department at Robert Morris University.
She, for one, is not inclined to drive in from her house in Moon to cope with the parking hassles and congestion inside and outside the Whole Foods store. "You couldn't go on a Sunday afternoon." After shopping there a couple of times and battling her way through the aisles, she decided, "I'm not going to fight this."
Dr. Marco now buys products at Festival Foods in Wexford, shops at farm markets and picks up items from the Wegmans grocery store when she is in Erie. One brand of natural soap that she likes can be ordered online.
It's not just the parking lot roulette that changed things. High gas and food prices have made people more inclined to buy cheaper brands available near home, if they can find what they want. "I knew people that used to drive into [Whole Foods]. But they don't drive in anymore," she said.
Oren Spiegler, of Upper St. Clair, has been waiting impatiently for Whole Foods to finally start construction on a site in the South Hills. He's been hearing for two years or so they might come to a site near him and he doesn't go into the East Liberty store much.
"It was definitely cramped. They definitely could use a bigger location," he said. "That's a very inadequate sized store."
To anyone concerned about the South Hills ability to support a large store with more upscale items, he points to the 117,000-square-foot Giant Eagle Market District store in Bethel Park. He said the parking lot there on a Sunday is also a traffic jam. "There are enough people willing to pay the prices that these items command."
Over the years, Whole Foods' stores have steadily grown larger. The original Dallas store was 20,200 square feet, according to the company's Web site. Its most recent quarterly earnings results show that stores opened between five and eight years ago averaged 33,900 square feet. Whole Foods stores opened in the past two years averaged 58,100 square feet.
Ms. Gross couldn't deny the Cedar Road shoppers have more elbow room. "I'm pretty sure Cleveland has wider aisles," she admitted.
When the retailer settled on a proposed shopping center in Collier along Interstate 79 for a second Pittsburgh-area location, the store site was listed at 68,000 square feet. Although the store remains on the company's Web site, officials have said there are no plans to build on that particular site now. The South Hills is still on the radar, said Ms. Gross.
Pittsburgh has not missed its window of opportunity for that second location despite a slowing economy that has a number of retailers taking another look at development plans, Ms. Gross said. "We're not going to stop growing or developing anything at this point in time because of the economy."
"You guys have been so patient with us," she said.
The East Liberty investment certainly seems to have paid off for the company. "The store we have right now in Pittsburgh is one of our best stores. They do an amazing job, they really do. It's always done really well in terms of sales." She declined to break out numbers for any single store.
While customers might like to see new amenities, Ms. Gross said there's no sign of any market share erosion.
Just a few blocks away on Centre Avenue, O'Hara-based Giant Eagle demonstrated its ability to move quickly in response to competition. The company took a 23,400-square-foot urban store and expanded it to 68,000 square feet, including 1,500 square feet devoted to natural and organic products in its center aisles, plus merchandise in the produce section. The remodeling was completed in 2006.
Giant Eagle is now taking the Market District model beyond Shadyside and Bethel Park. The company has announced plans to build a third location in Robinson that will exceed 100,000 square feet.
Giant Eagle spokesman Dan Donovan said such a larger format in suburban stores is preferrable, but added that compromises are required to make stores viable in urban areas.
"Certainly, the challenge is to do as much as you can with the space allotted in a very tight Shadyside area.
"These are challenges we all are facing," he said, referring to Giant Eagle, Whole Foods and the more-recent arrival to the grocery competition, Trader Joe's, which has one store on Penn Avenue in East Liberty.
Mr. Donovan said that, in assessing the regional market, Giant Eagle was able to find room for growth at the Robinson site, where its demographic studies supported opening another more-upscale operation.
"We consider all the competition. Whole Foods is certainly one member of a competitive set in that area [the city's East End]. But he would not comment on the business development of specific competitors near his firm's newly expanded Centre Avenue operation.
"There's certainly more room to grow with stores that focus on specialty, natural, organic and gourmet items that numerous retailers would have," he said.
Meanwhile, Whole Foods keeps scouting for locations.
Though it's been said many times before, Ms. Gross wants Pittsburgh to hang on a little longer. She's promising there will be more space in a second store. She said 45,000 to 50,000 square feet has been a good size in the Mid-Atlantic region.
In some cases, Whole Foods opened even larger locations, but those have lower initial productivity, higher expenses and cost more to build, wrote Edward Kelly, an analyst for Credit Suisse in a recent report. "While management trimmed the size of some stores in the pipeline, many are still too large in our view."
In recent years, the Pittsburgh real estate community has been working on ways to put together enough land in East Liberty to give Whole Foods the option of moving nearby.
One challenge has been dealing with different landowners who may have other plans. Sites in the mix include a surface parking lot owned by the Western Pennsylvania chapter of the American Automobile Association and the Parental Stress Center. Parking is a significant issue, as well.
Sources said last week that little progress has been made in the past year.
Ms. Gross did not offer any encouragement to those who would like to see the East Liberty location expand or relocated to a nearby site if property can be assembled. "At this point, there won't be any changes like that," she said.
Remodeling the existing location remains an option but she had not heard of any plans to do so at this time.
For now, she defended what's being offered here.
"The bottom line is that regardless of what store you go into -- whether it's in Pittsburgh, Cleveland or Austin, Texas -- you're getting that same quality of products. You're still getting the same quality and commitment that we have put in place."
Still, she seemed to recognize the experience might not be exactly the same.
"There might not be a coffee bar but you can still buy that same coffee and make it at home."