Whole Foods likely to stir pot in local grocery market

Rosewood Market is friendly and the local atmosphere comes out in the signage Customers can find two kinds of basil: the herb and the owner.

By Jenna Kepley
Edited by Michaela Mitchell

Whole Foods is opening in Columbia in about six months, and for Rosewood Market owner Basil Garzia, it's déjà vu.

When Earth Fare opened, it hit his market hard, and Garzia is worried. But for Keith Willoughby, co-owner of Wil-Moore Farms, Whole Foods is a lucrative opportunity for his family-run farm, which already supplies Garzia's market, to also supply the popular organic food chain.

Whether threat or opportunity, Whole Foods, which plans to open its Columbia store in October on Devine Street, is likely to shake up the local grocery market.

Texas-based Whole Foods, makes it clear its target markets have large numbers of college¬¬-educated residents, and Columbia's concentration of people with college degrees makes it a good location, said Andrew Wolf, an analyst with BB&T Capital Markets.

Rosewood Market regular Gail Barnes doesn't think Garzia should worry because of the "devoted clientele who will continue to shop there." But, Garzia says, "I'm worried anyway."

Wolf says there will almost surely be an impact on area businesses like Garzia's when the 37,876-square-foot Whole Foods opens about two miles from the 4,800-square-foot Rosewood Market.

Garzia opened his store on Rosewood Drive in 1989 after owning The Basil Pot vegetarian restaurant.

When Earth Fare, which is about half the size of the proposed Whole Foods, opened in 1999, Rosewood Market sales dropped 30 to 40 percent in the first two weeks and never fully recovered, he said.

Rosewood Market was Wil-Moore Farms' first customer. Willoughby has been supplying the market with eggs and chicken for the past eight years. But in late February, when local growers auditioned their products for a spot on the shelves at the Whole Foods Crosshill on Devine Street, Willoughby was among those who gathered at City Roots Farm.

"We haven't decided whether or not we will be supplying to Whole Foods," Willoughby said.

He acknowledged the appeal of more money and of his products reaching a wider range of buyers; however, he says he will remain loyal to Rosewood Market.

Garzia wants to see his suppliers be successful, but he says "it is a tricky territory" because losing his suppliers would be the biggest blow to his market.

Whole Foods will bring in more customers to surrounding stores while adding more competition in the area, said Marianne Bickle, head of the retailing department at the University of South Carolina.

"Competition, up to a point, makes the retailers work harder, think smarter and serve the customer's needs," she said. The health food store market in Columbia is still young and hasn't become saturated, leaving room for healthy competition Bickle says.

Multiple phone calls made to a Whole Foods spokeswoman seeking comment went unreturned.

Wolf said Richmond, Va., is a good example of what Whole Foods' entry into a market similar to Columbia's could bring. Ellwood Thompson's Local Market is a 23-year-old independent organic grocery store in Richmond. Whole Foods opened 12 miles away in the fall of 2008.

Sales dropped, marketing director Becky Lakin said. But business has returned, and the store has tripled to 15,000-square-feet, she said.

"We focus heavily on local and organic products," Lakin said. Ellwood Thompson's defines local as within 100 miles of the store, she said.

Garzia says he plans to gather as many local suppliers as he can to keep his store diverse and interesting after Whole Foods comes to town.

"I'm hoping I can stand on the sidelines and watch the big box stores slug it out," he said.

One thing Garzia probably won't have to worry about, for a while at least, is a second Whole Foods location in the market, Wolf said.

James Hardwick, another Rosewood Market fan, makes it a point to stop in every time he is in town visiting his girlfriend from Florida and says he will continue supporting Rosewood even after Whole Foods opens.

"I really like the people there and the smaller intimate environment. Plus, it's really got everything Whole Foods does in product categories, just maybe a bit less of the selection," Hardwick said.

But Garzia is still looking over his shoulder.

"I think people think we are bigger than we are because I've been around so long," Garzia said. "I don't know when to quit. Persistence is good."