WHOLE FOODS TO MOVE TO NEW HQ, BUILD 'LANDMARK' STORE

MARK HAMSTRA

AUSTIN, Texas -- Whole Foods said last week that it would build a new headquarters here to accommodate its plans to more than triple the number of stores by the end of the decade. The new building also will house an 80,000-square-foot landmark store featuring an emphasis on prepared foods, product demonstrations and other "theatrical" elements, said Will Paradise, president, Southwest Region, in an interview with SN last week.

Whole Foods plans to occupy about 170,000 square feet of the seven-story, 200,000-square-foot office building. It will be located across the street from its current headquarters, where it employs 185 people. The company plans to keep the 36,000-square-foot store located in its current headquarters open until the new building and store are completed in early 2005.

"We've been bursting at the seams here," said Paradise about the company's home office. "This will allow us to grow for the foreseeable future."

Whole Foods said it plans to have 400 stores in operation by 2010, up from its current tally of 131.

The company declined to reveal the cost of the new building or the terms of the long-term lease agreement. The developer is Schlosser Development Corp., and the architect is HKS-Dallas.

Scott Van Winkle, principal, Adams, Harkness & Hill, Boston, said Whole Foods' business model requires more home-office infrastructure than might be required of typical supermarket companies its size.

"Given the quality requirements they have in their stores, and the fact that they have their owns boats running out there in the Atlantic Ocean, I think this is a company that needs a little more infrastructure because of how they source their product," he said.

He said he expected the company to continue to grow through both new-store development and small acquisitions.

Although some analysts have speculated that Whole Foods might seek to buy natural-products retail rival Wild Oats, Boulder, Colo., Van Winkle said he doubted that would happen.

"It's always a possibility, but I don't think it's very likely," he said. Whole Foods tends to operate larger stores, he explained, while Wild Oats operates stores in a wide range of formats.

As for the new store being built in the company's headquarters, Van Winkle said he doesn't see it as an indication of a design change in the Whole Foods format, although the company said the store is its largest currently in development.