Weighing the Odds: 12 Things for Whole Foods to Consider in Detroit
The news that natural foods giant Whole Foods is sniffing around for real estate in Midtown Detroit has created a buzz among foodies who have long rued food deserts and the lack of high-quality grocery stores in the city. But is the store really such a slam dunk?
If the store actually opens — and I hate to second-guess Mayor Dave Bing, who reportedly said the store is “not a question of ‘if’ but ‘when'” — it could be a very big win for the struggling city, and especially for efforts to grow a stronger 24-hour community in Midtown. I can definitely see how a gleaming, bustling Whole Foods market, brightening a formerly forlorn stretch of Woodward Avenue, could aid efforts to attract new residents.
But inspired partly by a conversation with Dominique King of the Midwest Guest blog, my brain has been overloaded with confusion, skepticism and sometimes conflicting observations about this news. So I’ll try to empty it all out here by listing the factors working both for and against a Whole Foods Detroit.
Not Gonna Happen
- Whole Foods has a well-earned reputation as a progressive company that embraces organic food, offers good wages and benefits, strives to be a good corporate citizen and occasionally takes risks in locating new stores. But it’s still a publicly traded company that has to answer to shareholders. How do you suppose investors and the Whole Foods board will react to the idea of opening in Detroit? “Sure, the city has lost almost a quarter of a million people in 10 years, blah blah blah. But trust us; it’s a home run!”
- The demographics pose a serious challenge. Simply put, Detroit is a poor city with small pockets of relative affluence. A few years ago, the owner of an established Midtown bar I know was talking about opening a gourmet grocery store and told me he was consulting with a high-end grocer based in the suburbs. He abruptly dropped the idea after running the numbers. “It won’t work,” he shrugged.
- Crime is a big issue. Many people say it’s a big reason why large grocery chains haven’t invested in the city.
- The recent track record for high-end markets in Detroit isn’t good. Zaccaro’s Market, a small, gourmet grocer in Midtown, and Mercury Coffee Bar, a few miles south in Corktown, both closed after short runs in 2009. Both were criticized for being priced beyond the surrounding neighborhoods. “Whole Paycheck,” anyone?
- A Whole Foods in Detroit might need to rely on suburbanites who work in the city for a chunk of revenue. I know from first-hand experience that while a lot of people commute home to the suburbs along Woodward Avenue, many times more high-tail it out using the freeways. Would a Midtown location lure non-residents when there are already stores in Troy, Rochester Hills and West Bloomfield?
Build That Puppy!
- Midtown is an up-and-coming neighborhood that benefits from some relatively stable residential areas, the presence of Wayne State University and several other large employers. The neighborhood has been the recipient of billions of dollars in redevelopment investment in recent years and has held its own during the recession.
- The area is home to an aggressive community-development strategy. Wayne State, Henry Ford Health System and the Detroit Medical Center have offered $1.2 million in incentives to employees to encourage them to buy or rent homes in Midtown. Mayor Bing has offered incentives to persuade Detroit police officers to move into nearby neighborhoods. And the University Cultural Center Association is juggling a variety of initiatives to revitalize the area.
- While the economics are a challenge (see above), Whole Foods has the scale and financial resources to make a concerted go of it in Detroit. The company would certainly be in a stronger position to weather a slow start than the independently owned businesses listed above.
- Other grocers, such as Honey Bee Market La Colmena, have shown that high-quality markets that emphasize fresh meats and produce and quality niche goods can succeed in Detroit — at the right price.
- If it plays its cards right, Whole Foods could capitalize on Detroit’s nascent urban farming movement and nearby organic farms. That could give a huge lift to small farmers, who would have the world’s largest organic grocer selling their food. The presence of a localized supply chain might even help lower the store’s costs during the growing season. But most importantly for Whole Foods, it’s the kind of good PR money can’t buy.
- Light rail is in the works for the area, and with it, expectations of spinoff development that would lift all boats.
- A new Whole Foods could help solve the chicken-or-egg problem and give fence-sitters a stronger reason to move into the city, helping to grow the neighborhood and begetting more customers for the store.
If Whole Foods does indeed pull the trigger, my guess is that Detroit will end up with a scaled-back version of its typical store template. If you’ve ever been to Whole Foods’ Taj Mahal-esque store on Washtenaw Avenue in Ann Arbor, adjust your expectations downward.
That’s not to say Detroit couldn’t have a nice, inviting store. I’m sure it would be all of that and more. But if I’m in charge, I’m keeping a close eye on managing inventory and minimizing unused overhead, at least at first.
Just my hunch. What’s yours?
Photo by ifmuth.