Blog: Dean BestDespite losses, Whole Foods sees potential in UK

Dean Best | 4 July 2012

Whole Foods Market, the US natural and organic food retailer, has reported widening losses in the UK. However, one look at recent trading conditions in the UK organic sector means the retailer's losses here should hardly be a surprise. That said, Whole Foods still sees promise in the UK.

In the year to 25 September 2011, Fresh & Wild, Whole Foods' subsidiary in the UK, booked a net loss of GBP4.4m (US$6.9m), compared to a loss of GBP3.1m a year earlier. Its operating losses were GBP4.4m, against GBP3.1m.

In its report to Companies House, Fresh & Wild pointed to higher sales (identical-store sales increased 9.3%, it said) and said gross profit as a percentage of turnover was higher.

The previous year's results also included the benefit of a partial reversal of impairment charges. Without that one-off item, Fresh & Wild's operating losses would have been lower year-on-year.

The retailer said it remained "committed" to the UK and was in the process of opening more stores in its fiscal 2013. At present, Whole Foods has six stores in the UK. It has an outlet lined up for Cheltenham in south-west England and plans to open two more in London next year.

UK organic sales are under pressure. According to The Soil Association, sales fell 3.7% in 2001. Sceptics would question why Whole Foods is persisting with its UK foray and expanding in the country in such challenging trading conditions. The retailer's plans indicate Whole Foods, which has enjoyed strong recent quarters in the US, believes in the potential of its business here but, with organic sales in the doldrums, it will remain a challenging task to make its local business profitable.


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