Grocer’s woes hurt expansion in Canada

Whole Foods faces stiff market

Poor results in the U.S. will likely weigh further on Whole Foods Market’s onceambitious plans for Canada, which appeared to hit a wall last month after the boutique grocery chain cancelled two planned store openings in Alberta.

Austin, Tex.-based Whole Foods runs 12 of its 469 stores in this country, and had planned to open as many as 37 more locations here, a strategy outlined by chief executive John Mackey during a visit to Montreal three years ago.

But as such, Whole Foods has not ventured beyond B.C. and Ontario. Now, after Whole Foods reported its sixth consecutive quarter of falling same-store sales late Wednesday and announced it would close nine U.S. stores, industry watchers say the company might be scaling back on its earlier plans for this country.

It comes as the core of Whole Foods’ business — a wide selection of organic and healthier food, rounded out by a robust business in ready-made meals such as gourmet pizza and fresh-squeezed juices — has been mimicked by conventional U.S. grocery chains.

“The more conventional mainstream supermarkets have upped their game,” Mackey told investors on a conference call. After a prolonged period of being “really preoccupied with Walmart” and trying to compete with the discount behemoth, the chains began to look in a different, higher-end direction, Mackey said. “They began to study (Whole Foods) in a more systematic fashion, particularly as they began to see their customers begin to migrate over to doing more and more shopping with Whole Foods Market.”

It’s a phenomenon that has happened in Canada, too.

Stewart Samuel, program director at grocery and food research firm IGD Canada, believes Canada remains a good market for Whole Foods.

“Retailers here are investing in categories that are at the core of Whole Foods’ offer,” Samuel said., but he noted that its direct competition is more developed in the U.S.