Ozark Natural Foods experienced a dip in sales when an Akin’s Natural Foods store opened in Rogers last summer. After a few months of decline, things leveled out, and the Fayetteville-based natural food co-op reported year-over-year growth.
A similar cycle played out when Fresh Market, a chain also specializing in natural and organic foods, opened in Rogers in summer 2012. Sales declined for a bit at Ozark Natural Foods, then improved enough for an overall bump in revenue.
When (if?) Whole Foods opens its doors in Fayetteville, the co-op is hoping for a similar cycle to play out - an early dip, followed by increases once the “new” wears off the latest challenger. Not that Ozark Natural Foods won’t have a little more of a fight on its hands if Whole Foods really is coming to the planned shopping center on North College Avenue where an abandoned car lot now sits.
A competitor 2.2 miles to the north is a little different than one 30 miles to the north, especially one that has the financial backing of publicly traded Whole Foods.
Whole Foods recently reported a company-record $4.2 billion in first-quarter sales. Weekly sales per store increased, according to the company, to $719,000, and the company added 10 stores in the first quarter.
Of the $337 million generated in cash flow, the company invested $219 million of it in new and existing stores. Plans call for aggressive expansion throughout the United States (plus stores in Canada and the United Kingdom), although Fayetteville is not listed as “in development” on the Whole Foods website. Little Rock has the only Whole Foods location in the state.
Whole Foods representatives won’t comment for the record if a store is in fact in the works. A spokesman said via email, “We don’t have any details to share at this time, but will definitely reach out if and when additional stores are announced for the Arkansas community.”
There is plenty of circumstantial evidence and enough chatter locally to suggest the chain is strongly considering Fayetteville.
Earlier this month, the Northwest Arkansas Times reported that S.J. Collins Enterprises of Fairburn, Ga., a company with a history of building shopping centers that include Whole Foods locations, had submitted preliminary designs with the Fayetteville Planning Office for 3535 N. College Avenue. Those designs include an artist rendering of a 35,500-square-foot center anchored by a store labeled as “Whole Foods.”
So if - or when - Whole Foods adds to its 373 stores with a Fayetteville location, Ozark Natural Foods recognizes it will have a fight on its hands. Not that the Fayetteville fixture doesn’t have resources of its own, including $14.1 million in annual sales, plus a history in the community that dates back to 1971. Ozark Natural Foods, which is “owned” by 10,400 residents in Northwest Arkansas, features 70 local vendors and more than 200 local products in its store.
None of the region’s largest towns, it should be noted, seem as intent on supporting local food as Fayetteville, the funky, free-thinking college town.
Folks at Ozark Natural Foods are diplomatic when it comes to the possibility of another organic grocery store opening up just a few miles down the road. Publicly and privately, there’s an underlying hope that Whole Foods will introduce additional recognition to the benefits of eating more natural foods.
“When a competitor moves in, especially one as well established as Whole Foods, it can be intimidating,” said Ozark Natural Foods marketing director Alexa McGriff . “As much as we are nervous about it, we are excited. People who have never considered organic before will check it out and see what it’s all about. Then that opens the door for us.”
Officials with Ozark Natural Foods also have been investigating opportunities in central Arkansas. They were in North Little Rock earlier this month for a meeting with the community about launching a co-op there, after receiving multiple requests for a store in the city.
Bracing for the possible battle in Northwest Arkansas, though, will keep the board and the store’s leadership busy enough for a while. They decided not to invest financially in a store, but will be lending help in other ways.
For now, though, the focus is on surviving and thriving in the face of yet another challenge from an outside competitor.
If you have a tip, call Chris Bahn at (479) 365-2972 or email him at [email protected]
Business, Pages 73 on 04/27/2014