Upscale grocer chain plans store in Midtown Detroit

Whole Foods to open in Wayne State area

4/16/2012

DETROIT — A city infamous for its unemployment, decay, crime, and population loss would seem an odd place for an upscale natural and organic grocery chain to plant roots, but yuppie favorite Whole Foods Market Inc. is taking a gamble on the Motor City.

The Austin-based retailer plans to open a 20,000-square-foot supermarket with about 75 employees in Detroit’s Midtown next year.

One reason it may be willing to take the risk is that the neighborhood is an anomaly in a tough city enduring very tough times: People are moving in, businesses are opening, and hopes are high.

Midtown wouldn’t yet qualify as a success story by revitalization standards in New York or Chicago.

The 2-square-mile collection of smaller neighborhoods north of downtown still has vacancies and lacks the bustling, thriving feel of some of those larger cities’ neighborhoods in transition.

But it has solid anchors in Wayne State University, the Detroit Medical Center, and cultural institutions such as the Detroit Institute of Arts and Orchestra Hall as well as a growing number of start-ups and rehabilitation projects, and people are moving in thanks to relocation incentives offered by their employers.

It’s a hip, bright spot in a city that narrowly avoided a state takeover last week when Mayor Dave Bing, the city council, and Gov. Rick Snyder agreed on a deal giving the state input on Detroit’s finances and long-term fiscal restructuring.

The city’s budget deficit is about $200 million. Long-term structural debt is slightly more than $13 billion, and the city’s unemployment rate is among the highest in the country.

“This is the one area [in Detroit] that has a different demographic — more upscale, more youth, more students. It’s a great concentration of people,” said Kenneth Dalto, a Michigan retail analyst.

“They are buying into the plans of Detroit to grow the corridor.”

Whole Foods had been in talks to bring a store to Detroit for several years when it began looking at Midtown in 2010.

The company has said it has built relationships with Michigan farmers and feels it could offer something to Detroiters, who have long complained about having few places to buy fresh fruit and vegetables and high-quality groceries.

Walter Robb, Whole Foods co-chief executive, told local business leaders Friday that he likes the city’s resiliency.

“This is going to be a whole Whole Foods store. You’re getting our ‘A’ game here,” he told the Detroit Economic Club. “You’re not going to get anything less than our very best.”

The grocery chain has something in common with Detroit: battling adversity. It was hit hard during the recent recession and revamped itself by cutting costs, slowing growth, and carrying more lower-priced foods.

Mr. Dalto said that last move will prove critical in Midtown, where the demographic mix includes plenty of 20-somethings who don’t yet have the wherewithal for gourmet foods.

Mr. Dalto expects the store’s selection will tilt a little more in favor of necessities and brands younger people grew up with.