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Whole Foods to expand in Western Canada

Plans to open stores in Calgary, Edmonton and Alberta over next two years

Hailed as the original natural grocer, Whole Foods is looking to stretch its organic reach across Canada.

The American retailer announced plans yesterday to expand in western Canada with new locations in Greater Victoria, Edmonton and Calgary.

The company currently has four stores in B.C., with locations in development in North Burnaby and North Vancouver. The stores serving Edmonton and Calgary will represent the retailer’s first foray in Alberta. It plans to open its Greater Victoria and Edmonton locations in fall 2016. The Calgary location is expected to open summer of 2017.

READ: Why Whole Foods suddenly loves Canada

“We will be working with growers, suppliers, ranchers and manufacturers in Alberta and on Vancouver Island to source as many local products and services as we can find,” said Joe Rogoff, president of Whole Foods Market’s Pacific Northwest Region. “We’ll be connecting with community groups, other businesses, nonprofits and local community leaders to help us design our store and services, and to create dynamic partnerships.”

In December, Whole Foods opened its 10th Canadian location, in Ottawa. At the opening, Co-CEO Walter Robb said he'd like to open an additional 30 stores in Canada.

Whole Foods' western expansion was announced in conjunction with the retailer’s latest quarterly earnings. The upscale grocery chain reported a nearly 6% increase in fiscal first-quarter profits, beating Wall Street estimates and showing growth in a key sales measure.

The company's stock rose more than 3% in after-market trading on Wednesday.

READ: Nothing added in natural supermarkets, except sales

The Austin, Texas-based chain, which has more than 400 stores mostly in the U.S, is seeking to differentiate itself from competitors now that organic and natural products have become increasingly mainstream.

Last year, it launched a national advertising campaign called “Values Matter'' and introduced a “good, better, best'' ranking system that rates produce based on the supplier's farming practices.

At the same time, Whole Foods is also trying to appeal to a broader audience by shaking its pricey image that garnered it the nickname “Whole Paycheque.'' It’s sought to keep prices competitive by expanding its store brands and is also testing a customer loyalty program.

Whole Foods is also catering to an increasingly tech-savvy shopper and is rolling out an online delivery service with Instacart. Since launching the service in 15 markets last fall, it is averaging weekly online delivery sales of over $1 million, executives said on a conference call after the earnings results were announced.

For its latest quarter, Whole Foods reported that revenue at stores opened at least a year picked up from the previous period, after five straight quarters of slowing sales growth. That sales measure rose 4.5%, up from the 3.1 per cent in the previous quarter. The metric is a key indicator of a retailer's health because it excludes results from stores recently opened or closed.

READ: Mrs. Green’s Natural Market grows in Canada

``We attribute our broad-based sales momentum to our customers' positive response to our many strategic initiatives, along with improving consumer confidence,'' Walter Robb, co-chief executive officer of Whole Foods Markets Inc., said in a statement.

The Austin, Texas-based company said it had net income of $167 million, or 46 cents per share, in the quarter ended Jan. 18. That compares with $158 million, or 42 cents per share, in the year-ago period.

The results beat Wall Street expectations. The average estimate of analysts surveyed by Zacks Investment Research was for earnings of 45 cents per share.

The grocery chain posted revenue of $4.67 billion in the period, which fell just short of Street forecasts. Analysts expected $4.68 billion, according to Zacks.

The company's shares rose $1.89 to $55.40 in after-hours trading after climbing 49 cents to close at $53.51 in regular-session trading Wednesday.

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