The Tenants Speak: Whole Foods, Torchy's Tacos And VertsKebap

Whole Foods just opened its 436th store yesterday in Vancouver, and it has 400 stores in the pipeline, Whole Foods Global VP Lee Matecko told attendees at Bisnow’s Austin retail event this week. Lee attributes Whole Foods’ success to its connection with neighborhoods and its “high touch” activities that are about meaning and purpose, not revenue. He says when you do what’s right rather than what’ll make you money, you’ll actually make more money. (Must be true; Whole Foods did $15B in sales last year.) To that end, the company has initiatives like sourcing food from impoverished countries or adding farmers market spaces that don’t earn Whole Foods money, building greenhouses, etc. It’s seen its groceries revitalize communities in Detroit and New Orleans. We snapped Lee, left, with Centergy Retail’s West Miller at our event.

Both Torchy’s Tacos and VertsKebap are pretty saturated in Austin, respective founders Mike Rypka and Michael Heyne told the crowd. (They’re here with moderator Padgett Stratemann principal Kevin Fincher.) Torchy’s started in Austin 10 years ago, and Mike says it can maybe open three or four more stores here. He’s turning his attention outside of Texas, opening its first out-of-state store in Denver next week and then eight to 10 stores a year for the foreseeable future. He’s looking for a new hub, perhaps Atlanta or Nashville to get closer to the East Coast. Likewise, Michael is eyeing two or three more areas to put up VertsKebaps and then is turning its sights to the East Coast but at a much slower growth rate.

It’s getting much costlier to open stores in Austin (double or triple when he first started, Mike says), but rents and construction costs aren’t fazing these guys. Labor is the big problem, which is one reason VertsKebap raised its minimum wage to $10 in Texas. That gets good people in the door, Michael says, and then he wins them over with the company’s culture and values.