Retail: Whole Foods Loses $18m in Uk Debut

The upmarket US supermarket chain Whole Foods is facing an uphill struggle to expand across the Atlantic after suffering losses of $18.4m (£9m) in a year at its six newly opened stores in Britain.

Whole Foods, which specializes in organic and healthy produce, last night revealed that it was reviewing its nascent British operations and will be cutting back on openings in its home market.

"We are disappointed in our results in the UK," chief executive John Mackey said. "We are carefully evaluating all aspects of our operations in the UK."

Whole Foods' global profits slumped 31% to $33.9m, sending its shares tumbling 15% in after-hours trading on the Nasdaq exchange. It blamed sluggish economic conditions for a slowing in sales growth in the US, where it will open only 15 stores over the next 12 months rather than the planned 30 or 40.

In Britain, the arrival of Whole Foods was billed last year as a potential boon to gourmets. Its London outlet is spread over three floors of a former Barkers department store in Kensington. But the company's results suggest that shoppers are yet to be won over.

Mackey said there had been some improvement in recent months with UK losses dropping to $16m on an annualized basis. "Our goal is to reduce our operating losses to $13m in fiscal year 2009, $7m in fiscal year 2010 and to approach break-even in 2011," he said, adding that Whole Foods had suffered similar initial losses when it entered Canada.

"We believe the long-term growth potential in the UK is much greater th an in Canada."
By Guardian Unlimited