A taste for the Northwest: Whole Foods is expanding

Grocers in the crowded Puget Sound supermarket arena are stepping all over each other to win loyal consumers, but that's not enough to keep gourmet chain Whole Foods Market from trying to shake things up a bit.

Whole Foods will open its second Washington-state store in Bellevue in June. The Austin, Texas-based chain's Seattle store is one of the company's top performers, and Whole Foods wants to add to that success by opening four more stores in the Seattle-Bellevue area in the next two years.

"We've had success with Seattle, and we're looking to continue that trend," said Ron Megahan, president of the Northern Pacific region for Whole Foods. "We're always looking at expanding in the Pacific Northwest, like in the Seattle, Portland and Eugene areas."

Across the country, Whole Foods is opening stores as fast as it can, piggybacking on consumers' growing interest in natural and organic foods. Between 2000 and 2003, natural and organic food sales increased from $11.9 billion to $15.6 billion, according to Nutrition Business Journal.

The chain has 41 stores — a record 1.9 million square feet — under development, an 81 percent increase in square footage over the same period last year. The company spends about $8.6 million on a store, excluding inventory, and opens 10 a year.

"The Seattle area is a natural for them," said Bert Hambleton, an Issaquah-based grocery consultant. "They have two overriding issues they look for — high education and high income — and this area has both. But they're a little late getting here."

In Bellevue, the company is building a 56,047-square-foot store, complete with a 5,000-square-foot mezzanine, at the northeast corner of 116th Avenue Northeast and Northeast Eighth Street. The 4.4-acre project will include about 210 parking spaces.

The Bellevue store will be "dramatically different" from the company's 50,000-square-foot store at Roosevelt Square in Seattle, Megahan said, and will include a wine-tasting bar; a cooking school; expanded produce, international and prepared-foods sections; smoked meats; and chocolate-dipped fruits.

On Monday, the company will show off a little at its annual shareholders meeting in Seattle. As part of a three-day event, 800 employees and vendors will visit the Roosevelt Square store; Select Fish, a seafood distributor and processor the company bought last year; and Pike Place Market.

Established chains aren't necessarily worried about Whole Foods' expansion around Puget Sound, but some are working on new ways to attract loyal customers. Supermarkets are spending millions to remodel, open more stores, expand produce sections and add private-label products.

QFC finished major remodeling projects at its Bellevue and University Village stores. Fred Meyer opened a store in Redmond focusing on natural and gourmet foods. Town & Country Markets plans a 56,000-square-foot Central Market gourmet grocery store in Mill Creek.

Larry's Markets, which runs a store near the new Whole Foods in Bellevue, restructured its finances last year and brought in a new management team. The six-store chain wants to open six more stores in King County and hopes to have leases signed on one or two sites by the end of the year.

Remodeling began this week at Larry's Bellevue store. Installation of new grocery cases and lighting should be finished next month. A second phase of remodeling is to begin early next year.

In a crowded supermarket field, local chains have an edge over newcomers like Whole Foods.

"A lot of people think Whole Foods is only a specialty store, and they're going to have combat that perception when they open," Hambleton said. "At what point will everyone who's done their shopping at Whole Foods get their fill?"

Kristina Shevory: 206-464-2039 or kshevory@seattletimes.com