March 4, 2016 |
There is a phenomenon sweeping the country, known to many as the Whole Foods Effect. Essentially economists are saying that the various Whole Foods locations are neighborhood anchor stores, drawing consumers from near and far. The ‘effect’ portion of this comes when you evaluate the number of other stores/shops that follow Whole Foods, the potential consumer base, and the tax income for the area.
The process is cyclical and good for neighborhoods and developers. Whole Foods looks for areas of growth that include a population of health conscious consumers who want what is best for them and their families. They look at demographic information that includes at least one working adult per household. But one of the most important factors is college educated consumers. Their model deems it necessary to build/open in an area that has a minimum of 200,000 college educated consumers per capita.
This model fits perfectly for the new location going in at Closter Plaza in late 2016 in Closter, New Jersey. Much of Closter Plaza is undergoing intense renovations currently, but will be revitalized with a mix of national retailers and local boutiques. Included in these new stores is a Whole Foods Market. Located in Bergen County, one of the nation’s wealthiest, most prestigious and highly educated communities, it is a perfect match for the Whole Foods model.
The Whole Foods Effect, or cycle, is beneficial for neighboring communities as well. Nearby communities will also feel the positive financial effects of the anticipated opening of Whole Foods, as housing and property values increase, more people venturing into Tenafly, Creskill and/or Demarest while on their way to or from the Closter Plaza. The retail and tourist dollars will be spread among the neighboring boroughs, positively affecting each one. The addition of a Whole Foods to any neighborhood adds not only short term valuation, but long term benefits as well. Being a neighborhood anchor encourages developers to remodel, renovate and update their properties, while bringing in additional businesses to area office parks. Providing amenities to staff is equally as important as it is to potential home owners, especially if they are one and the same.
When a new Whole Foods franchise is announced, the landslide of other consumer stores that follows is an essential piece to this cycle. With Whole Foods as the anchor, it is not only drawing consumers from all around to shop at their location, it is providing a population of educated, health conscious consumers to other potential retailers. And those retailers will pay high dollar to position themselves next to such a well-respected brand. The domino effect for retail development is positive for the neighborhood and surrounding areas as this is key for real estate valuation.
When evaluating where to move, especially if you have multiple choices, having amenities is essential. Being able to shop close to where you live is important to most households. Many people are interested in keeping their money within their communities as well, so having retail areas (with trusted brands represented) will help drive your home value up. It is shown that home values for neighborhoods surrounding a Whole Foods location increase by an average of 17.5%. Whole Foods is not the single reason, but the ‘effect’ it has on the development plan of an area is.
Englewood Cliffs, New Jersey, is home to the Whole Foods Market Regional Corporate Offices. And with several New Jersey locations, many anchors in their area, it is no wonder the brand has built itself such a positive reputation. They listen to their consumers, provide affordable and healthy food choices, and participate in various types of give back programs within the non-profit community. By investing in their market research, Whole Foods is improving every community they enter, physically and financially.