365 by Whole Foods to close at Bellevue Square

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Re: 365 by Whole Foods to close at Bellevue Square

Post by buckguy »

Having recently been to Detroit, there is an impressive amount of residential development downtown which where the WF store is located--it's also not far from Wayne State, cultural institutions and hospitals which are natural customer bases, and also not far from Eastern Market which draws widely on weekends. There's no WF in or even near Grosse Pointe and I wouldn't be surprised if it pulled some customers from there. You can't compare that with a Kroger that was in area that was barely holding on to its middle income homeowners or even Meijer, which has 2 locations: one located near a relatively stable middle class area another near an affluent area part of the city.
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Re: 365 by Whole Foods to close at Bellevue Square

Post by storewanderer »

I would guess the opening of the new WF in Detroit probably helped development in the surrounding area. Detroit has really struggled for years on getting grocery stores due to the various issues there but I think the biggest is the decline in population density/ongoing decline in population there over the years, among other issues; But in any case, anyone, regardless of their income level, will be happy to have a convenient grocery store.

Looking more closely at the Whole Foods Detroit location it appears well located, visible, the surrounding area looks fine, and as pointed out above by buckguy there are things around it that will bring in customers.

It looks to me like Whole Foods made a good move finding a good location in Detroit. The city has a very bad reputation and has a lot of failure for grocers but I think in this case Whole Foods may have found a location that works.

This is a bit of a contrast from the closing store in Bellevue which had difficult access, no visibility, no dedicated parking... and a good lot of strong nearby competition.
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Re: 365 by Whole Foods to close at Bellevue Square

Post by pseudo3d »

I guess it would make sense that Whole Foods in Detroit works as a destination store, and that's what really keeps it going (I suspect that's what is going on). But the 365 stores are not destinations, and they don't have the same cachet and merchandise mix Trader Joe's does. And even with a lower overhead by cutting out the full service departments, they still can't make this one work apparently. Good thing Amazon is going to take the wheel on this one, it would be a bigger disaster if it wasn't.
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Re: 365 by Whole Foods to close at Bellevue Square

Post by Brian Lutz »

Another update on this situation: An appeals judge overturned the previous judge's ruling, saying that Amazon is not obligated to keep the store open:

https://downtownbellevue.com/2018/12/17 ... RfO8l1UDUw

Amazon has to continue paying rent on the space (plus paying other fees/penalties), but is not obligated to continue operating the store. Something tells me we haven't heard the last of this.
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Re: 365 by Whole Foods to close at Bellevue Square

Post by klkla »

If I'm reading that correctly Whole Foods agreed to stay open for 10 years without interruption as a term of their lease. So, I would think they would be on the hook for whatever damages could be proved by the owners of the shopping center in addition to all rent due until 2035 regardless of today's ruling. The damages could include the percentage of sales they would have earned, plus loss of income from other tenants due to lower traffic in the center.
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Re: 365 by Whole Foods to close at Bellevue Square

Post by storewanderer »

This store must have been losing some serious money for them to go through this rather than keep operating it. They could have just taken their brand off the store and ran some sort of an also ran...
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Re: 365 by Whole Foods to close at Bellevue Square

Post by babs »

storewanderer wrote: December 17th, 2018, 8:19 pm This store must have been losing some serious money for them to go through this rather than keep operating it. They could have just taken their brand off the store and ran some sort of an also ran...
Sorry but the 365 stores are terrible. If they were small urban fill-in stores, it might work. But most of them are in suburban locations where there are much better options. I suspect many of the 365 locations are breakeven at best. This one with sky high rent might have had even higher overhead costs and sales may have been even lower since the lack of a deli/fresh foods might have limited store traffic from the people shopping in the mall and looking for a quick lunch.
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Re: 365 by Whole Foods to close at Bellevue Square

Post by pseudo3d »

babs wrote: December 18th, 2018, 8:31 am
storewanderer wrote: December 17th, 2018, 8:19 pm This store must have been losing some serious money for them to go through this rather than keep operating it. They could have just taken their brand off the store and ran some sort of an also ran...
Sorry but the 365 stores are terrible. If they were small urban fill-in stores, it might work. But most of them are in suburban locations where there are much better options. I suspect many of the 365 locations are breakeven at best. This one with sky high rent might have had even higher overhead costs and sales may have been even lower since the lack of a deli/fresh foods might have limited store traffic from the people shopping in the mall and looking for a quick lunch.
The one near me seems to do well, even during slow hours. This is probably because it's a very different area than Bellevue. It's an urban in-fill area that used to be an industrial site, located right next to the freeway, a somewhat underserved grocery market (nearest locations are currently Kroger, though an H-E-B an exit down opening next year might damage it), and not a lot of places to eat in the area that aren't chain restaurants.

Demographically, it's a bit of a crapshoot--the area almost immediately north or east is clearly not Whole Foods material, to the west is a little better (though again, it goes through a semi-industrial area to get there), and the main demographic to the south (the Heights) gives it mixed reviews since they were expecting a "real" Whole Foods.
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Re: 365 by Whole Foods to close at Bellevue Square

Post by Brian Lutz »

To be fair to Amazon, this whole mess was inherited on their end from the Whole Foods merger. The store was planned built and opened prior to the Amazon merger, and I suspect that even though the store closed afterward it's unlikely that Whole Foods management would have continued to operate it even if the merger hadn't happened. My guess is that Amazon moves to pay whatever they need to in order to break the lease quickly and be done with it, and I suspect that number is going to be well into the eight figure range. They already have an Amazon Books store in this mall (which I believe predates the Whole Foods merger) and with their insatiable demand for real estate in Seattle and Bellevue I suspect they're going to find themselves needing to lease KDC owned office space at some point, which is going to be hard if there is an unresolved dispute.
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