In Cities, The Last Frontier For Grocers, Who Will Succeed?

Whole Foods last month announced plans to open a store tailored to a growing population of posh-loft apartment dwellers in downtown Los Angeles. The fresh and natural foods grocer also announced a new flagship location in Brooklyn, complete with rooftop gardens. At the other end of the spectrum, in June it opened a store in an embattled section of Detroit, just a month before the city filed for bankruptcy protection.

"The Detroit store is doing way beyond our expectations, doing twice as many sales as we expected," said David Lannon, executive vice president of operations at Whole Foods (WFM) . "We're in it for the long haul with the city. There is a burgeoning foodie culture there that goes across all economic groups and they all shop there."

Supermarket chains largely abandoned inner-city areas during the 1980s and 1990s, leaving "food deserts" typically served only by small corner markets. More than a decade of investment to revive inner-city areas across the U.S. has spurred an uptick of upwardly mobile residents in those areas.

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