The Next Wave of Natural & Organic Grocery Expansion

Natural and organic grocery is entering a new growth cycle, marked by specialty players pushing into new geographies, premium grocers expanding into urban markets, and big-box retailers treating wellness as a core platform rather than a niche aisle. In 2025, fresh-format grocers posted the strongest year-over-year foot traffic gains, exhibiting double-digit growth in Q3 (+10.5%) and Q4 (+10.9%), which was well ahead of traditional grocers (+2.6% in Q3 and +4.4% in Q4). Placer.ai attributes the lift in part to prepared foods and salad bars as an alternative to dining out, alongside shoppers’ growing focus on health and wellness.

MOM’s Organic Market is entering the Midwest

Founded in 1987, MOM’s Organic Market has built a specialty footprint across the Mid-Atlantic, and in January it signaled a meaningful leap west with plans to open two stores in Illinois. MOM’s has signed leases in the affluent suburbs of Mount Prospect and Naperville, with openings planned for 2026–2027, marking the 27-store chain’s entry into the Midwest.

What’s notable here is market selection. For a chain that has historically grown within the Mid-Atlantic, Chicagoland isn’t the “next adjacent market.” It’s a real leap—and a vote of confidence that there’s room for additional specialty organic choice beyond the existing set of local and national players.

The Fresh Market opened in Chicago in the space previously occupied by Dom’s Kitchen & Market. Image Source: McMillanDoolittle

The Fresh Market goes urban in Chicago

We’ve also seen premium grocers push further into dense city neighborhoods. The Fresh Market already had six stores in the Illinois suburbs but entered Chicago proper by taking over former Dom’s Kitchen & Market locations, including an Old Town store that opened in late 2025 and a Lincoln Park location that opened the year prior.

The broader takeaway: premium grocery can work in urban neighborhoods when the real estate, curated assortment, and operating model are aligned—an approach reflected in The Fresh Market’s Chicago move, as well as the expansion of the small format Whole Foods Daily Shop concept.

Whole Foods is still the scaled growth engine—even as Amazon trims elsewhere

Earlier this year, Amazon announced it would close its Amazon Fresh and Go stores. The company is pruning banners that didn’t scale while doubling down on its most established brick-and-mortar grocery asset, Whole Foods Market. Amazon has said it plans to open 100+ new Whole Foods Market stores over the next few years and continue expanding its small format urban concept, Whole Foods Market Daily Shop, which has delivered better-than-expected early results in its initial New York locations.

Whole Foods Daily Shop opened in Lenox Hill, NY. Image Source: McMillanDoolittle

Sprouts and Natural Grocers are still in disciplined growth mode

Among pure-play natural/specialty grocers, the expansion story continues:

• Sprouts Farmers Market plans to open 40+ new stores in 2026, following 37 openings in 2025. In January, Sprouts opened its first New York store on Long Island, signaling a continued push into underpenetrated regions.
• Natural Grocers expects to open 6 to 8 new stores in fiscal 2026 and has announced plans for its first Wisconsin store, a meaningful marker of continued whitespace expansion.
• At the ultra-premium end, Erewhon has continued to discuss its “Erewhon 2.0” wave, a brand evolution emphasizing larger, more experiential stores, expanded prepared foods and beverage programs, and a broader wellness ecosystem as it continues selective expansion across Southern California.

Sprouts Farmers Market in Tyler, TX. Image Source: McMillanDoolittle

Target is betting on wellness as part of its turnaround strategy

This isn’t just a specialty-grocery story anymore. In January, Target introduced what it called “a new era in wellness” and announced a 30% expansion of its wellness assortment. What’s in that expansion is telling: more protein-forward food and beverage, deeper supplements (including goals like gut health and immunity), more functional and non-alcoholic beverages, and newness across family wellness and skincare. Target also announced its first-ever in-store wellness events (sampling and giveaways), alongside upgraded digital discovery via a Wellness Hub and dietary-preference shopping tools.

When a mass retailer starts treating wellness as a headline platform (not a subcategory), it’s a signal that “better-for-you” is becoming a mainstream battleground for differentiation.

So why now?

Health and wellness demand has remained sticky post-pandemic, and shoppers are also more label-literate than they were a few years ago. Retailers with clear standards around ingredient transparency, sourcing, and functional benefits are earning trust and repeat visits. The growth of organics supports that shift: the Organic Trade Association’s 2026 Organic Market Report notes that U.S. certified organic sales reached $76.6B in 2025, up 6.8% year over year. GLP-1s are adding fuel as well, as more consumers prioritize eating less but eating better and seek out nutrient-dense, high-quality foods and functional products tied to specific health goals.

The takeaway

The common thread across these moves isn’t simply that “organic is growing.” It’s that health-forward retail is becoming clearer and more intentional: edited assortments, strong brand standards, and formats that scale efficiently, whether that’s new market entry, urban expansion, or disciplined unit growth.

Curious what these shifts mean for your growth strategy across assortment, store format, or competitive positioning? Contact us to discuss how McMillanDoolittle can support your next phase of growth.