Whole Foods 2008 Annual Report Download - page 18

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The following table provides additional information about the Company’s acquired Wild Oats store locations as of
September 28, 2008:
Stores at Stores at
Beginning of Stores Stores End of
Fiscal Year Relocated Closed Fiscal Year
Total stores acquired 74 (6) (13) 55
Average size (gross square feet) 24,000
Total gross square footage 1,342,000
Average age (in years) 10.2
Growth Strategy
Whole Foods Market’s growth strategy is to expand through a combination of new store openings and acquisitions of
existing stores. We have a disciplined, opportunistic real estate strategy, opening stores in existing trade areas as well as new
areas, including international locations. Our new stores typically range in size between 35,000 and 50,000 square feet and are
located on premium real estate sites. We have also grown through acquisitions, with approximately 25% of our existing
square footage coming from acquisitions. Because the food retailing industry is highly fragmented and comprised of many
smaller local and regional chains, we may continue to pursue acquisitions of smaller chains that provide access to desirable
areas, locations and experienced team members. Going forward, however, such acquisitions are not expected to impact our
future store growth or financial results due to the size of the Company’s existing store base.
We have an ongoing relocation strategy and each year relocate some of our smaller stores to larger locations with improved
visibility and parking. For the 17 stores relocated in fiscal years 2004 through 2008, the overall average increase in size was
approximately 129%. Our historical store growth is summarized below:
2008 2007 2006 2005 2004
Stores at beginning of fiscal year 276 186 175 163 145
Stores opened 20 21 13 15 12
Acquired stores - 109 1 - 7
Divested stores - (35) - - -
Relocations and closures (21) (5) (3) (3) (1)
Stores at end of fiscal year 275 276 186 175 163
Remodels with major expansions1 1 2 1 - 2
Total gross square footage at end of fiscal year 9,895,000 9,312,000 6,377,000 5,819,000 5,145,000
1 Defined as remodels with expansions of square footage greater than 20% completed during the fiscal year.
In fiscal year 2008, we terminated 13 leases for stores in development totaling 679,000 square feet, or an average of 52,000
square feet per store. As of November 5, 2008, we had signed leases for 66 stores scheduled to open through fiscal year 2012
totaling approximately 3.3 million square feet, or approximately 33% of our existing square footage. These stores, which
average approximately 49,000 square feet in size, include 13 relocations and eight new areas. Our historical growth in stores
in development is summarized below:
November 5, November 20, November 2, November 9, November 10,
2008 2007 2006 2005 2004
Stores in development 66 87 88 65 53
Average size (gross square feet) 49,000 51,000 56,000 55,000 49,000
Total gross square footage in development 3,294,000 4,485,000 5,003,000 3,626,000 2,594,000
As a percentage of existing square footage 33% 48% 77% 60% 50%
We are focused on the right sized store for each location and, since announcing in the third quarter of 2007 our intent to
decrease the size of several leases in development, we have downsized nine leases by an average of 13,000 square feet each.
We currently operate 10 stores in excess of 65,000 gross square feet and have an additional 10 stores of that size in
development, five of which are relocations. While our larger-format stores are very powerful in dense urban areas and certain
other limited circumstances, we recognize that smaller stores can also produce great returns for us as well. We believe a store
size of 35,000 to 50,000 square feet is appropriate in most circumstances to maximize return on invested capital and EVA,
and we expect the majority of our stores to fall within that range going forward.
Tender dates provide some visibility on the timing of our new store openings. For accounting purposes, a property is
considered tendered on the date we take possession of the leased space for construction and other purposes, which is