On June 16, Amazon announced its plan to purchase Whole Foods Market for $13.7 billion.

Commercial Real Estate

How The Amazon-Whole Foods Combination Will Impact DFW’s ‘Big Game’ In Grocery Shopping

Multiple Amazon centers and 13 Whole Foods stores ensure North Texas will be a key proving ground.

While it’s hard to say exactly what an Amazon-owned Whole Foods shopping experience will be like, you can be sure that all eyes will be on the effects of this proposed retail combination. The dust is now settling after Amazon’s June 16 announcement that it wants to buy Austin-based Whole Foods Market for $13.7 billion. And, with Amazon fulfillment centers located in Dallas, Coppell, Haslet, and Fort Worth—together with 13 Whole Foods Market stores in North Texas—Dallas-Fort Worth will be a key proving ground for the combined companies.

Ward Kampf, who’s president of Northwood Retail—the company that leases and manages The Shops at Park Lane, where Whole Foods Market is an anchor tenant—views the acquisition as a positive. “I think there’s a bit of excitement around this transaction,” he said. “I think we’re optimistic about this and very curious at the same time. I think that’s globally the feeling.”

When it comes to picking up groceries in Dallas, residents have plenty of options because of the number of grocers with operations in North Texas. In addition to Whole Foods Market, companies including Kroger, Natural Grocers, Tom Thumb, Sprouts, Walmart, H-E-B and its Central Market brand all have a presence in Dallas, among other cities here. “The grocery market in Dallas is very competitive—as competitive as anywhere in the country,” Kampf said.

Bob Young, executive managing director at Weitzman, echoes Kampf’s sentiments. “The broader comment about the deal is that the grocery category in the commercial retail real estate world has been driving new development, and it is the catalyst for so much activity,” said Young. “The most active category in retail today is food; inside that category, the grocers themselves have been driving so much of what has been going on.” Dallas, in particular, will see its share of impact from the deal, he added: “We have a population and growth that is just what the doctor ordered for increasing grocery sales.”

Steve Lieberman, CEO of The Retail Connection, expects to see Amazon and Whole Foods Market continue to grow in North Texas. “The synergies between their operations clearly provide additional catalyst and support for additional points of distribution,” Lieberman said. “Further, DFW’s demographics and central location position it to be a very strategic growth market for the company.”

And, in an era where people seem to be writing off physical retail real estate locations, Lieberman believes this move is a strong validation for brick and mortar stores. “Projects with Whole Foods leases now have even stronger credit, which will further reinforce their valuations,” he said. “However, there will be a potential loss of foot traffic to the Whole Foods stores and centers, per Amazon’s capacity to fulfill customer needs without a traditional store visit.”

Lieberman sees the acquisition impacting North Texas on a broader scale than just the addition of retail real estate—including expansion into multiple types of development. “Additional stores will underscore additional projects, both retail and mixed use, as well as distribution facilities and related operations, all of which will drive the positive jobs driven implications that follow,” he said.

“Competition is good,” concluded Young. And, “DFW is a big game.”

Comments

  • Mavdog

    I’m seeing the title of this piece – “How The Amazon-Whole Foods Combination will Impact DFW’s “Big Game” in Grocery Shopping”- but alas there’s no “How” in the article. zip. nada.