As Amazon-owned Whole Foods looks to expand into different regions across the United States, a prime opportunity has presented itself for their real estate needs; empty locations that were previously home to Sears and Kmart stores, according to Yahoo Finance.
The search has already begun, as Yahoo reports that Whole Foods managers visited a site in Utah formerly home to a Kmart which was shut down in mid-2017 amid Sears’ financial woes. Sears declared bankruptcy in October of 2018, and has shut several hundred stores in recent years as it scrambled to stabilize its finances.
Whole Foods now has more than 470 stores around the country, still a far cry from its competitors in the grocery space, including Walmart and Kroger. Eighteen months after Amazon’s acquisition, Whole Foods now has the money to open new locations in areas that were once out of reach, including states like Wyoming and Montana.
Sears, on the other hand, hasn’t been profitable since 2010. Over the past three years, it has closed 123 Sear stores and 205 Kmart stores. While Whole Foods concentrates locations around coastal cities and affluent neighborhoods, Sears’s national footprint spreads across the country and covers a broad demographic, which can help Whole Foods scale up fast at a relatively lower cost. –Yahoo Finance
“There are lots of vacant retail space that they can take advantage of, and that gives them access to reasonable retail locations, but I also think they want to secure good real estate deals by filling voids, and getting good rental levels from landlords,” GlobalData managing director of retail Neil Saunders told Yahoo Finance.
Landlords, meanwhile, are excited at the prospect of grocery stores and food retailers thanks to the foot traffic they would undoubtedly bring to dying malls across the country.
“First and foremost, we’re looking for the best location we can find. So if that’s an existing center–second generation space — that meets all of our criteria… we’ll jump all over it,” said Jim Sud, executive vice president of growth and business development at Whole Foods.