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Whole Foods to launch smaller, cheaper stores
For years, Consumer Reports readers have lauded Whole Foods Markets, the high-end grocer with 400 stores from coast to coast, for exceptional produce and other perishables, wide array of organics, sparking shopping environments, and blue-chip service. However, they’ve been equally vocal about the chain’s outrageous prices. After all, Whole Foods didn’t earn the derisive nickname, “Whole Paycheck,” for nothing.
Now, it appears, all that grumbling has paid off. In a recent conference call with financial analysts to discuss the company’s quarterly earnings, CEO John Mackey and other executives teased the Austin, Texas-based retailer’s plan to launch a “uniquely branded store concept unlike anything currently in the marketplace.”
In a presentation filled with hyperbole but few details, executives described the new format as a concept offering “industry-leading standards at value prices, a modern, streamlined design, innovative technology, and a curated selection.”
For more ways to save at the supermarket, read our Supermarkets Buying Guide.
Said Walter Robb, co-chief executive officer: “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.“
The company says smaller stores with a lower cost structure, a more standardized design, and limited product assortment would help deliver goods for less.
Mackey said the company would release specifics about the new store before Labor Day, in September. In fact, the company hadn’t planned to spill the beans about the concept for a while, but decided to do so now out of concern that the news would leak out and fuel speculation because Whole Foods is actively signing leases for the stores. Executives said the first of the new stores would open next year and rapidly expand from there.
While a lower-priced Whole Foods would be a welcome addition to the supermarket landscape, there’s no denying that many supermarket chains are rethinking their marketing strategy toward Millennials.
This influential group of 18-to-35 year olds numbers 75.3 million, according to the U.S. Census Bureau. That’s larger than the contingent of Baby Boomers. But millennials march to a different drum beat. Food is much more a source of fun, exploration, social connection, and individual expression. Compared to Boomers, for instance, they’re less inclined to plan meals or make shopping lists in advance; many don’t want to cook everyday; and they don’t keep a fully stocked pantry. They’re “occasion” eaters, meaning they build a meal or ingredient list around a recipe or encounter that inspires them. In fact, one-quarter of all meals consumed by twentysomethings include items purchased the same day.
To keep restaurants from hijacking these shoppers, who are inclined to make last-minute meal decisions, many grocers have responded by developing immediate-consumption sections that sell fresh prepared meats, salads, sandwiches, sushi, and beverages. Some, like Whole Foods, are bringing a restaurant feel right into the shopping experience.
—Tod Marks
Consumer Reports has no relationship with any advertisers on this website. Copyright © 2006-2015 Consumers Union of U.S.
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