By Evelyn Harford

Jan. 30, 2015

Specialized American organic grocery giant, Whole Foods Market is staging a Canadian invasion.

Riding on the wake of increased growth in 2014, Whole Foods announced their plan to open 40 new Canadian stores.

Sales are up nine per cent from last year, reaching over $1.4 billion.

Whole Foods’ stocks shot up nearly eight points on NASDAQ after the expansion announcement in November 2014.

Marion Chan,  a Toronto-based business strategy consultant specializes in the Canadian grocery market. Chan warns that this expansion should not be taken without caution, nor should investments be made in haste.

Whole Foods has experienced massive success in Canada since its flagship store opened in 2002. The Landsdowne Park location in Ottawa is the most recent Canadian store, bringing the total up to ten.

“We love Canada,” said Allison Phelps a Whole Foods Public Relations Specialist.

“You guys are more concerned with what goes into your foods and are more aware of environmental practice and tend to really value products that take those things into consideration when creating them.”

Whole Foods has been successful in its initial growth into Canada, but Chan warns that the company should not bit off more than they can chew.

“I don’t know if such an aggressive expansion is going to be that fruitful for them,” said Chan. She explained that competition for the Canadian grocery dollar is intense.

“They’re going up against the conventional grocery stores in Canada which are the Metro’s, the Loblaws’ and the Sobeys’,” said Chan. “The promise for 30 stores may be too bullish.”

Against the current competition, Whole Foods does have an important quality going for it– exclusivity. Chan said that Whole Foods would bring new products the Canadian grocery consumer is yearning for, but with exclusivity, comes an increased cost at the check-out.

Chan worries that, “Whole Foods has priced itself out of the mainstream.”

Whole Foods will not be immune to distribution hick-ups upon expansion in Canada. The company admits that distribution will remain a difficult since, to date, there are no distribution centres in Canada.

“We do rely heavily on our local producers to fill the shelves,” said Phelps.

Distribution mismanagement was one factor that led to Target’s demise in Canada–so Whole Foods knows this hurdle is not to be taken lightly. 

Store locations will be carefully considered right along distribution concerns. Phelps said that location will be everything. Whole Foods uses the goldilocks approach to picking location.

“We are very meticulous and methodical with our expansion. We want to make sure that everything is just right,” said Phelps.

Emphasis on location is especially important for Whole Foods. Chan doesn’t think the store will be a destination for people just yet.The store is not as mainstream and well known outside of Ontario and British Columbia–the only two provinces with open locations.

This is echoed by Irene Thornton, a self-proclaimed loyal Whole Foods customer. Thornton says she is happy to have a location so close to her at Landsdowne in Ottawa.

Thornton admits though, “To go out of my way? I don’t.”

So, while Thornton is lucky to have a location close to her, many Canadians will be waiting a while for Whole Foods to come to them. As of yet, the only store confirmed to open in 2015 is the Leaside location in downtown Toronto.