Whole Foods makes £36m loss in Britain

Author: By James Thompson

The US natural and organic food retailer opened its UK flagship on London’s
trendy High Street Kensington to a fanfare in June 2007 to take on Marks &
Spencer and Waitrose, but it is yet to open another store. The 80,000 sq ft
flagship has struggled to compete against established UK grocers, and has,
at times, suffered from woeful customer traffic, as well as customers
trading down and away from pricier organic food during the recession.

Its UK subsidiary Fresh & Wild made a pre-tax loss of £35.9m for the year
to 28 September 2008 ? hit by an impairment charge on several stores and
related administrative support assets, according to accounts filed at
Companies House last week. In a statement, Whole Foods said: “The
£27.1m impairment charge is simply an accounting measure that does not
accurately reflect the progress the company has started to see in the UK.”

In addition to its flagship High Street Kensington store, the grocer has
rebranded the last four remaining Fresh & Wild stores ? the chain it
acquired in 2004 ? to the Whole Foods Market brand. Sources said Whole Foods
was “very close” to opening another store in the UK, although it
is unclear where it will open in the capital.

Whole Foods said it had taken “significant” steps over the past year
to “ensure its long-term future” in the UK, including closing its
Bristol store in September. It has also parachuted in senior executives from
the US to the UK, notably Jeff Turnas, a company veteran of 15 years, as
regional president, as well as David Doctorow, its newly appointed vice
president in the UK, who has 27 years experience.

Mr Turnas said yesterday: “Whole Foods Market has been making changes and
improvements to the Kensington store, and we have been pleased with the
positive reactions we have been receiving from our customers. We plan to
continue to make these types of changes at our UK stores as well as continue
to aggressively look for additional store sites in London.”

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