Whole Foods to consider a larger range of store sizes

Whole Foods Co-CEO John Mackey said this week that the company may consider opening stores of "mixed sizes" in the future. Mackey said larger stores opened between 2007 and 2009 "are still competing strongly as they get older... and have higher long-term potential than smaller stores because they offer more parking, less spoilage and greater efficiencies."

These 4-6 year-old stores are mostly in the 40,000 - 45,000 square foot range, compared to the smaller (30,000 - 35,000 SF) stores the company has focused on in the last few years as it entered smaller markets.

According to Executive VP of Operations David Lannon, the company is now shifting back to a 35,000 - 45,000 square foot range. In addition, Whole Foods may look to acquire smaller stores like the 16,000 square foot former Johnnies Foodmaster store it recently acquired and opened in Boston.

Mackey said he expects a "sea of change" in the industry as smaller independents look to sell, providing opportunity for chains like Whole Foods.

Net income at Whole Foods rose to $142 million in the quarter that ended April 14, a 20.3% increase as compared to the same period a year ago. Sales increased 13.3% to $3 billion, and identical-store sales rose 6.6%. Average sales per gross square foot totaled $991 for the quarter.

Independent grocers saw net profit gains in 2011

Independent grocery stores, which make up about 5% of the grocery market as compared to 20% 10 years ago, saw average net profits before taxes rise to 1.12% in 2011, a 3.7% gain from the previous year, according to a survey by the National Grocers Association and FMS Solutions.

According to the survey, same-store sales for independents rose 2.6%, but when adjusting for food-at-home inflation (changes in retail prices for food), it was actually a 2.2% decrease. Gross margins increased from 25.68% to 26.33%.

The survey also found that independents whose net profits were in the top 25% of the sector significantly outperformed their peers, as their net profit before taxes was 4.67%, an increase of 14% from the previous year.