Apr 24
Trader Joe’s is planning to open its fifth Houston location at 11683 Westheimer Road, the Houston Business Journal learned, which will bring the grocer into an area that’s already heavily dotted with big-name grocery chains.
The 9,500-square-foot store is expected to be complete by late 2015 or early 2016, reps for the Monrovia, California-based grocer said.
Austin-based Whole Foods Market Inc. (Nasdaq: WFM), San Antonio-based H-E-B Grocery Co., Phoenix-based Sprouts Farmers Market Inc. (Nasdaq: SFM), Houston-based Fiesta Mart and Houston-based Phoenicia Specialty Foods all have locations on Westheimer within two miles of the site. Houston’s grocery wars are well-documented, with relative newcomers like Sprouts and Trader Joe’s hoping to get a piece of the lucrative pie. See the map below.
Even so, oversaturation of Houston’s grocery market may not be an issue, yet.
Today’s shopper makes multiple stops, said Suzanne Anderson, a vice president at Houston-based Midway Cos. with 25 years of retail experience.
“I think somebody like a Trader Joe’s isn’t expecting to get a customer that is doing their sole shopping there, so other grocers being there shows that it’s an area that has strong demand and strong sales. And they are looking to get a piece of that,” Anderson said. “Their customer may be shopping somewhere else to get their daily items, but will go to Trader Joe’s for more specialty things.”
Whole Foods is currently expanding from its current 25,663-square-foot space at 11145 Westheimer Road to 45,000 square feet on the other side of Wilcrest Drive, into part of a now-closed Randall’s.
Jason Baker of Baker Katz, who has represented retail tenants like Chipotle and Ashley Furniture, said that the Whole Foods expansion most likely factored into the decision by Trader Joe’s to position itself in the area.
“The fact that other grocers are doing so well out there, that they’ve been there and they’re doubling down and making a big investment out there, it tells them that their typical customer — well-educated, affluent — is out there,” Baker said. “The Whole Foods expansion, that was all the evidence that Trader Joe’s needed that their customer is there.”
Baker said that although grocery chains try to keep their locations’ sales under wraps, they are all very interested in how well their competition is faring in their respective positions around the city.
“H-E-B is paying attention, Whole Foods is paying attention,” Baker said. “Nobody’s on an island.”