Whole Foods Market has laid bare the financial woes of its fledgling UK flagship store in London. In its first quarter, the world's largest organic food retailer said its High Street Kensington store accounted for half of its 2 per cent drop in return on invested capital in stores less than two years old.
Jeff Turnas, a Whole Foods veteran, will come to these shores, as regional president of the UK, to improve performance. The retailer rebranded its four Fresh & Wild stores to the Whole Foods fascia this month.
This week, John Mackey, the chairman of Whole Foods, said: "Our overall operating cash flow in the UK on a currency-adjusted basis improved to negative $1.7m in the first quarter from negative $3.3m in the first quarter last year, and we believe that dedicated and focused executive leadership will drive further improvements in our financial performance, resulting in strong returns over the long term."
He added: "We believe there is great growth potential in the UK and we are taking proactive steps to improve our operations there."
However, his comments and poor financial data support the widely held belief that Whole Foods' 80,000 sq ft flagship store in London has struggled badly since opening its doors in June 2007. The store has suffered from customers baulking at its expensive prices and limited parking facilities.
The launch also came just before the credit crunch reared its ugly head and sales of organic food started to taper off. Whole Foods said it has been "actively looking" at potential new sites in the UK and hopes to unveil a new UK store location in the "very near future".
Whole Foods said that the arrival in the UK of Mr. Turnas, who is currently regional president of the North Atlantic region, was part of a wider reorganisation that has split its North Atlantic region into two. Previously, its North Atlantic region comprised all its stores and facilities in Maine, Massachusetts, Rhode Island, Central Connecticut and the UK. But the UK, which will be run by Mr. Turnas, has now become a separate region for the company. The role of Rick Bonin, the vice president of its UK operation, remains unchanged.