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Premium food retailing on the rise in CanadaWednesday, October 01, 2014 > 11:32:40
Whole Foods opens a new GTA store; Pusateri’s plans Oakville location; Loblaws and Longo's reach into the luxury food market.
Two days after it opened in North York, the newest Whole Foods Market in the GTA was packed at lunch, with office and construction workers lined up for fresh-baked pizza, made-to-order sandwiches and custom stir-fry meals.
Despite a reputation for being pricey, Whole Foods Market stores are popping up with increasing frequency, in Canada and in the U.S.
“We’re actually growing faster than we ever have before,” said Michael Bashaw, Whole Foods Market regional president.
The new store at Yonge St. and Sheppard Ave. brings the number of Whole Foods stores in Ontario to five, with another opening in Ottawa in November and one in Leaside in June, a signal that premium – some call it luxury – food retailing is gaining traction in the GTA and across Canada.
It’s not just Whole Foods. Pusateri’s Fine Foods recently signed a deal with RioCan to open in Oakville Place in the fourth quarter of 2015, as part of a $30-million redevelopment of the mall.
It is the premium food store’s fourth GTA location since it was founded as an Italian grocery store in the 1960s.
“What we’re finding is, it’s not just the elite of the city, it’s the educated customer that is coming to us pretty much every day,” said Frank Luchetta, president, Pusateri’s Fine Foods.
Luchetta spoke by phone from Europe, where he was touring Paris, London and Berlin to gather design ideas and exclusive products for the stores.
Whole Foods and Pusateri’s don’t – publicly at least – admit to being rivals.
“Pusateri’s does a fabulous job. Their store on Avenue Rd. is a little miracle,” said Bashaw.
Pusateri’s position is that Whole Foods openings creates a halo effect, lifting the entire category.
Although there is some overlap, they are targeting different markets.
Whole Foods is focused on fresh, organic and ethically produced products in environmentally kind packaging. The company website includes a long list of ingredients Whole Foods Markets find unacceptable in food products, including artificial colour, flavours and aspartame.
Pusateri’s bills itself as a gourmet food emporium, selling the finest, freshest foods, including prepared foods.
Besides, there seems to be enough room for both of them at the top of the market, and then some, with large grocery chains also offering customers more prepared foods and premium products.
Sobeys Inc. has partnered with celebrity chef Jamie Oliver in an effort to deliver better, fresher foods to Canadian dinner tables.
Longo’s stores offer more than 300 varieties of cheese. Certified chefs prepare fresh meals sold ready-made. The Maple Leaf Square store features a beer and wine bar with local beer and fresh oysters.
And since launching the ambitious Maple Leaf Gardens store in 2011, Loblaw Companies Ltd. has copied the format, which they call ‘inspire,’ for use in 18 other stores, including stores in Forest Hill and at Yonge St. and Yonge Blvd., near the wealthy enclave of Hoggs Hollow.
“Trend-wise, we are seeing that that’s an important place to be right now,” said Loblaw Companies Ltd. spokesperson Kevin Goh.
The trend is local and global, said Bryan Gildenberg, analyst, Kantar Retail.
“What you clearly have globally is an interest – particularly among younger shoppers – about where their food comes from. There is an increasing sense that organic food is not just a luxury item, but more of a need,” said Gildenberg.
Gildenberg says Toronto in particular is a hotbed for premium food retail because of the ethnic diversity of the city. As a result, many GTA residents have grown up eating a variety of ethnic foods, increasing their interest in a broad array of recipes and ingredients.
Canadians are also well-served by discount grocers like No Frills, FreshCo and Price Chopper, Gildenberg points out. Customers can save on everyday items at discount grocers and splurge on exclusive ingredients or products in upscale stores.
Whole Foods debuted in 1980. The first international Whole Foods store opened in Yorkville in 2002. The North York store is the 398th in the system.
The company expects to grow by as many as 50 locations in the next year for a total of nearly 450 stores systemwide. It operates in Canada, the U.S. and the U.K.
Openings in Canada will take place slowly, Bashaw said.
“Based on strict numerical analysis, there should be room for 40 stores. That would be across the entire country, from Halifax, and working your way to the West Coast.”
He sees room for three-to-four stores in Montreal and one in Winnipeg, but it will take many years to evolve.
“I think people misunderstand who the hunt for retail real estate works. Just because you want to be somewhere doesn’t mean the right site is available,” said Bashaw.
Like Pusateri’s, Whole Foods targets neighbourhoods where there is a high number of residents with college degrees.
“We find that the higher the level of education, the more people are open to concerns about healthy foods,” said Bashaw.
It’s not for everyone. Boneless, skinless chicken breasts sell for $27.90 a kilogram at Whole Foods. The chicken is ethically produced – no carts, cages or crowding, and the chickens enjoy an “enriched environment” and “enhanced outdoor access.”
The lunch offerings are accessibly priced – at $3 for a small serving of curry chicken. A vegan Pad Thai noodle bowl sells for $8.99 for 396 grams.
The 45,000 square foot the new Whole Foods also boasts an array of Canadian-made artisan products, including 26 exclusive food, beverage and lifestyle items. The store is focused on environmentally friendly packaging, recycling, using alternative energy and local and regional materials to build stores.
Marion Chan, principal at Trendspotter Consulting, says Baby Boomers triggered the trend towards premium foods.
“They have demanded the freshest food, the best selection at the best prices. You can see where they have driven the evolution of our grocery shopping.”