Whole Foods has officially launched a new, cheaper and millennial-friendly version of its brand by hosting its first store’s grand opening today.
The upscale grocery chain plans to open 12 more of these smaller concept stores over the next two years.
These supermarkets are intended to appeal to new shoppers, especially younger customers with less disposable income.
Why New Stores?
Some think that the new 365 brand could save or at least bring fresh life to Whole Foods, which has been experiencing a slump in sales for a while and has been struggling to expand.
The company’s stock prices are down 7% this year alone which is in addition to the 10% decline in 2014 and the massive 33% drop in 2015.
Then there was the debacle from last year surrounding allegations in New York City that the grocery stores were grossly overcharging customers. Whole Foods was able to settle the charges by agreeing to pay a $500,000 fine to regulators.
Then there are the image issues.
There is a prevailing perception that the chain sells commonplace items at ridiculous prices.
Whole Foods is aggressively trying to rebrand itself and possible change the face of grocery shopping in the process. According to Whole Foods, the 365 chain is a “quality-meets-value shopping experience.”
So what’s different?
The biggest selling point at 365 is lower prices, which company executives hope will attract people who wouldn’t normally shop at the more expensive Whole Foods stores.
Less variety and in store service
• There will be a larger amount of non-organic produce and meat sold in smaller packages. Shelves will features less variety than a typical Whole Foods, and there won’t be any butchers slicing cuts of meat to order.
• Fewer employees
• No cut-to-order delis
• No onsite bakery
365 stores will be about 30,000 square feet compared with the 45,000 square feet of their traditional stores.
This is to specifically to attract younger shoppers and keep prices down, the 365 stores will offer more technology based solutions to assist shoppers in finding what they want.
• In-store iPads will assist with ordering food to go or to scan wine labels in lieu of a traditional wine guide
• Digital pricing
• Speedy Check out areas which will only accept Apple Pay or credit cards
Similar to the rewards programs of most traditional supermarkets, 365 will offer savings based on how much you spend.
Trendy Specialty Shops such as a bike shop or music shop
According to CNN Money:
“Whole Foods has already nixed the idea that 365 stores might host tattoo parlors, but it is pursuing the possibility of opening on-site businesses via its “Friends” program. The vegan fast-casual restaurant by Chloe will have a location inside the Silver Lake 365 store, as will an automated tea kiosk and a coffee and beer shop. Whole Foods says that in the future shoppers may find bike shops, music stores, barber shops, pet supply retailers, or knife-sharpening services inside 365 stores.”