Two Decades On, Why Whole Foods Can’t Make Its U.K. Operations Work

The new King’s Road store was the first in the U.K. for Whole Foods in more thna a decade.

Whole Foods Market

This week’s news that Whole Foods Market had recorded a loss in its U.K. operations and that revenues had dropped came as no great surprise for the upscale grocery retailer, which has spent over two decades trying to crack Britain.

The company reported pre-tax losses of around $27 million for the year to Dec. 31 2024, despite a 14% decline in operational costs to circa $65.5 million last year, adding to a similar $31.3 million deficit the year prior.

The results mean the business has pulled in total losses of over $271 million since debuting in the U.K. in 2004 and which after openings and closures currently has just six outlets in the U.K., all in capital London.

Its Fulham and Richmond stores only contributed to sales until June 10, when the sites were closed, while margins at the retailer contracted over the period because of those store closures combined with increased supply chain costs, newly filed accounts revealed.

Despite the grim numbers, Amazon-owned Whole Foods seems to refuse to give up on Britain, In March it opened its first new U.K. store in a decade, a 21,8000-square-foot outlet along London’s Kings Road, famous for its fashion stores.

A Whole Foods Market spokesman insisted: “We continue to focus on sustainable growth in the U.K. market, as demonstrated by our successful opening on the King’s Road. This new location represents our commitment to serving more customers and communities in the U.K., while maintaining our high-quality standards and local partnerships.”

Whole Foods Struggles To Connect

So why can’t Whole Foods connect with the British public? The Austin-based grocer entered with high hopes in 2004 but has faced persistent obstacles, ranging from high costs to shifting consumer behavior. The organic, high-end food retail niche in the U.K. is small and crowded, with upscale grocers Waitrose and Marks & Spencer already well placed to serve the market, with substantial store networks.

There is also a culture mismatch. In the U.S., Whole Foods’ scale allows premium organic groceries to be a core offering but in the U.K. many consumers expect a mix of price, convenience, and range and Waitrose and Marks & Spencer offer just that – from premium treats to price-matched essentials.

By contrast, Whole Foods has struggled to shake off the perception that it offers only high-priced luxury at a time when many U.K. shoppers remain very price sensitive, especially after recent years of inflation, making the premium pricing Whole Foods hard to sustain outside of affluent, central neighborhoods.

Operational costs have also weighed on the retailer. Large flagship locations such as its 80,000-square-foot High Street Kensington flagship are costly to operate and its London locations often have limited parking, meaning that sales are focused on convenience and food-to-go, not a weekly shop.

Whole Foods Enters Via Fresh & Wild

Whole Foods first entered the U.K. by acquiring the Fresh & Wild store chain, which were typically smaller format stores on upscale main streets. The first full-size U.K. Whole Foods store opened along luxury thoroughfare High Street Kensington in June 2007. That flagship store, located in the old Barkers department store building, was hugely ambitious, retailing across several floors with multiple food halls and restaurants.

In subsequent years, Whole Foods attempted further expansion, with new stores in the affluent London boroughs Richmond and Fulham, plus Glasgow and Cheltenham among others. However, many of these were unprofitable or had to be shuttered. Losses mounted and by around 2014 the U.K. arm had already accumulated losses of more than $135 million.

Since then and Amazon’s acquisition of the global Whole Foods operation in 2017, there has been a period of retrenchment and refocusing. Store closures – including Richmond and Fulham – and a rationalization of logistics have been part of cost-cutting or repositioning. However, not to be counted out, Whole Foods opened on the King’s Road, Chelsea.

Clearly, U.K. expansion will remain focused on inner London, high footfall and affluent locations, but after over 20 years trying, Whole Foods appears no nearer finding the right formula and it remains difficult to see how it ever will.