AUSTIN, Texas – Whole Foods Inc. co-CEO Walter Robb teased during the company’s latest earnings call the launch of a “new, uniquely branded store concept unlike anything that currently exists in the marketplace.”
Offering the upscale, healthy grocery chain’s “industry-leading standards at value prices, this new format will feature a modern, streamlined design, innovative technology and a curated selection. 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 prices.”
He did not indicate the new format’s size. He promised to reveal more details about the as-yet unnamed format by Labor Day. The company expects to open the new stores in 2016.
“The company is building a team to focus exclusively on this new concept and is currently negotiating leases,” he said. “Given the more standardized design and product assortment, the company expects a fairly rapid expansion from there. 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.”
He continued, “Over the past several years, we have explored the idea of new formats several times but never felt the time was right, particularly given our accelerated growth plans. That issue is now behind us, as we have successfully increased our new-store openings for six years. In addition, we now have a successful track record of opening some smaller-format stores with a lower cost structure.”
The emphasis on value pricing may be in part to address the perception of how expensive it can be to shop at Foods, which earned the nickname “Whole Paycheck.” The new format will likely appeal in particular to younger shoppers who are attracted to Whole Foods' social and ethical ethos, but turned off by the price of the high-end food, Neil Saunders, CEO of retail consultancy Conlumino, told USA Today.
The chain “still has a problem on price," he said. Millennials “just don't have the disposable income to make that their destination of choice for grocery shopping."
The new concept follows other retail giants like Walmart and Target, which have been opening smaller-format, convenience-focused stores in urban markets that have fewer products and are heavily focused on fresh food and snacks, said the report. The new Whole Foods stores will likely compete in the same space, Saunders said, though it will stand out because the brand has already built a reputation for high-quality food.
Still, millennials want convenience. "They're much more into piecemeal shopping and buying on the go," Saunders said.
Founded in 1978 in Austin, Texas, Whole Foods Market is a leading retailer of natural and organic foods. In fiscal year 2014, the company had sales of approximately $14 billion and has 417 stores in the United States, Canada and the United Kingdom.
Click here to view the full USA Today report.
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