What the arrival of Whole Foods means for the Glebe
Christa Thomas, Ottawa Citizen
Published on: October 28, 2014, Last Updated: October 28, 2014 2:41 PM EDT
A Whole Foods market will be opening its doors at Lansdowne Park next month. The Ottawa store is the upscale U.S. grocery chain’s 10th outlet in Canada (the other nine are in B.C. and greater Toronto). All are in established, tony neighbourhoods. So what will the store’s arrival mean for area residents here?
The grocery retailer specializes in organic and natural foods and body care products that, according to the company’s website, are “free of artificial preservatives, colors, flavors, sweeteners, and hydrogenated fats.” Whole Foods also has a long list of ingredients it deems unacceptable and a set of quality standards that appeal to a growing demographic of health-conscious consumers.
Whole Foods, according to Gabriel Lowenberg, Portfolio Manager at Lowenberg Investment Counsel Inc. in Ottawa, who has written about Whole Foods stock, is “a destination store.” It offers a shopping experience customers are willing to drive to, if necessary. The company’s stock market performance over several years is accordingly impressive.
Even so, the grocery chain’s executives have joked that they could make money simply by buying surrounding real estate before Whole Foods arrives in a neighbourhood, rather than by selling groceries. Company co-chief executive John Mackey has also repeatedly stated that Whole Foods is highly selective in choosing specific business locations, including taking account of the number of university-educated residents as an indicator of affluence. The chain has a reputation for moving into urban areas at just the right time for economic development, having in the past displayed an almost uncanny ability to predict economic growth.
The phenomenon associated with Whole Foods openings — labeled the “Whole Foods effect” — indicates an observed rise in nearby commercial and residential property values of up to 20 per cent. The company’s high standards and quality products attract affluent customers, and the increased traffic in turn sends a signal that often lures other high-end stores and restaurants into the area, making it more popular overall.
The Glebe, where the grocer will be located, is already a desirable, if somewhat patchy, and eminently walkable neighbourhood, and “fresh foods and walkability go hand in hand,” said Judy Faulkner, long time resident of the Glebe and owner of Faulkner Real Estate Ltd. “Drawing more buyers to the already sought-after Glebe and Old Ottawa South communities — as well as Old Ottawa East, which will become more accessible once the anticipated footbridge arrives, could put upward pressure on prices of nearby homes.”
At the same time, according to Eric Stephens, assistant professor of Economics at Carleton University, it is possible that “Whole Foods targets areas that can and will continue to support a high-end store, choosing neighbourhoods in which prices are already on the rise.”
In either case, Whole Foods, as a business anchor of the Lansdowne complex, could be a harbinger of further gentrification. Urban gentrification is a complex, contradictory, and highly controversial issue, because an increase in rents and property values may squeeze out residents at the lower end of the economic spectrum. It divides residents along economic lines and may displace those with lower incomes. Renters, in particular, may be pushed out, and apartment buildings subsequently converted into more expensive condos.
At the same time, gentrification also means economic vitality, restoration of unsound buildings, investment in infrastructure, and the concomitant social ramifications, such as quality schools, less crime, and so on. Few would not be in favour of that. What is more, if property prices rise in the Glebe and neighbouring areas, property taxes, under the current system, also rise, and those monies are used to subsidize, among other things, lower-income Ottawa residential areas.
Christa Thomas is a university lecturer and writer. She blogs about Canada’s Women of Confederation at
http://women-of-confederation.ca.
http://ottawacitizen.com/news/local-news/thomas-what-the-arrival-of-whole-foods-means-for-the-glebe
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