by Lynda Kiernan
Whole Foods has announced it is launching a new chain of lower-priced stores in addition to its main chain, to be called “365” (in honor of the name of its in-house brand) that will cater to Millennials looking for access to healthier foods at lower prices.
Whole Foods is creating a team dedicated solely to the development of “365”, which management hopes will grow to equal the 375 stores of the original Whole Foods business.
“It will deliver a convenient, transparent, and values-oriented experience geared toward millennial shoppers, while appealing to anyone looking for high-quality fresh food at great price,” said Whole Foods CEO, Walter Robb. “We believe the growth potential for this new and complementary brand to be as great as it is for our highly successful Whole Foods Market brand.”
Whole Foods hopes that the launch will help to combat slumping sales figures and regain market share in the face of increasing competition from the likes of aggressive rivals such as Walmart, which this spring announced its plan to improve its fresh food selection and reduce prices, Trader Joes, Sprouts Farmers Market, Fresh Market, and Costco, which has been reported to have surpassed Whole Foods to be the top organic-food retailer in the U.S.
Indeed, for the 12 weeks ending April 12 Whole Foods reported same-store sales increased 3.6% – a disappointing figure compared to the Wall Street expectation of 5.3% growth and historical double digit growth the brand has seen in recent years, despite cutting prices and launching its first national advertising campaign, according to Consensus Matrix.
It is also hoped that the launch will serve as a public relations re-set for Whole Foods, which has garnered the widely known reputation, and second un-official name of “Whole Paycheck” because of its high prices.
Leases for store sites are already being negotiated, and further details surrounding the launch are expected to be released in September, prior to the opening of the new stores next year.
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