Whole Foods to close its downtown Davis store after canceling plans for midtown location

With little warning for its landlord, Whole Foods announced Wednesday that it would close its downtown Davis store as part of a “more thoughtful growth strategy.”

The upscale grocer’s decision to pull out of Davis comes a few months after it canceled plans for a store near 21st and L streets in midtown Sacramento.

“As we work to position Whole Foods Market for long-term success, we have carefully evaluated our portfolio of stores to align with a more thoughtful growth strategy,” said a statement released Wednesday by the Austin, Texas, company.

“As a result, we have decided to close the Davis store. This was not a decision that was made lightly, and we are working closely with all affected team members to find alternative positions at nearby stores where possible.”

Mark Friedman, president of Sacramento-based Fulcrum Property, owner of the building that houses the Davis store, said his company was notified of the closure just minutes before Whole Foods released its public statement.

“It is a disappointment and something that unfortunately caught us by surprise,” Friedman said.

As a result, Friedman said, he has not considered what type of business he might recruit to fill the 22,000-square-foot space, which was previously occupied by a Borders bookstore. Whole Foods’ failure to succeed at the site indicates the building might not be appropriate for a grocery store, he said.

Diane Parro, chief innovation officer with the city of Davis’ Economic Development Department, said she was besieged with phone calls and emails from residents after Wednesday’s announcement.

“It’s never a good thing to have a business that wanted to be part of our community and not be able to have the success they want,” she said, noting that the announcement took city officials by surprise.

Whole Foods Market announced in September that it had canceled plans to open in a highly anticipated midtown Sacramento project, citing numerous delays by the developer. The grocery chain was to be the centerpiece of a two-phase project that included a six-story building near 21st and L streets that would have housed the supermarket along with 97 apartment units.

The chain also operates stores in Folsom, Roseville and Arden Arcade.

Supermarket industry consultant Robert Reynolds of Reynolds Economics in Moraga said Whole Foods has been struggling with weakening sales and high costs associated with its many departments and large staff.

“Whole Foods is having a hard time in the corporate sense,” said Reynolds. “Their sales are not doing well.”

About a week ago, Whole Foods announced it was closing three regional kitchens that made prepared foods that are sold in its stores, opting instead to rely on suppliers.

The Davis store, at 22,000 square feet, is much smaller than most Whole Foods stores, which typically have been to up 60,000 square feet, Reynolds said. The Davis location, in the back of a small shopping center, also did not appear to be optimal for a supermarket, he said.

It faced considerable competition, from a larger Nugget market – also an upscale, high-service store – as well as two Safeway stores, and the Davis Food Co-op, which Reynolds noted is about the same bicycling distance from the UC Davis campus as Whole Foods.

Parro said residents have suggested a number of businesses they would like to see replace Whole Foods. They include an Apple store, fashions for the mature woman and stores that would appeal to younger members of the community. At least one person suggested a Crate and Barrel, she said, but others have been adamant that they want something that would be unique to Davis and not a national chain store.

This story was originally published February 8, 2017 at 1:25 PM with the headline "Whole Foods to close its downtown Davis store after canceling plans for midtown location."