Whole Foods, Safeway, grocery stores, condominiums, demand, supply

Texas-based grocery chain Whole Foods believes it has the answer to the scarcity of urban grocery stores: locate stores in new skyscraper condo complexes. Miami's new 74-story Met 3 Tower features a Whole Foods store on the ground floor. Even though the building is 3 years away from completion, a third of its condo units are already sold--and in a city with 50,000 condo units under construction, that says a lot about the appeal of a condo complex with its own on-site grocery store.

Developers around the country argue that the inclusion of a Whole Foods store in their development helps sell condominium units. With wine-tastings, cooking stations, and prepared foods to taste, a trip to a Whole Foods store is more of an adventure than a simple grocery store errand is. A Whole Foods store was located in a Sarasota, Florida, condo complex, and all 95 units presold for anywhere from $280,000 to $1.7 million.

Whole Foods plans to increase its square footage nationwide by 57% by 2008. Of the 59 new stores being planned, 12 are in mixed-use developments in big cities. Whole Foods executives argue that, while they prefer to be stand-alone stores with their own parking just like other grocery stores, sometimes the landscape doesn't allow that. And if it wants to attract a wider clientele, especially in urban areas where available space is scarce, some modifications are indeed necessary.

In fact, Whole Foods isn't the only grocery store locating within high-rise complexes. Safeway, Inc., has located stores under residences in a number of cities nationwide for the same reasons. But Safeway just doesn't offer the same ambience that Whole Foods does.