Declining stock and sales
It’s been a slow year for Whole Foods, but the company has their fingers crossed that things will turn around soon. After their stock price fell roughly 7 percent in the last half year, the Austin-headquartered supermarket chain is betting big on 365, their new lower-priced concept store targeted at younger shoppers.
The appeal of Whole Foods has always been their vast selection of organic, non-GMO or just generally healthy offerings, but they’ve always been hindered by the sometimes high price point. We’ve all heard the regurgitated “Whole Paycheck” joke by now. The 365 stores attempt to overcome that. The fourth 365 store, and the first in the Austin area, is set to open in Cedar Park in April.
Whole Foods has faced stiff competition from both brick-and-mortar retailers and new online rivals. While massive chains like Walmart and Target have invested more in carrying low-price organic options, new online stores like FreshDirect, Thrive Market, and Amazon Fresh have continued to grow.
The new face of Whole Foods
In addition to lower prices, the 365 stores are also slightly smaller than the typical whole foods and offer slightly less variety. While the stores don’t include cut-to-order delis or on-location bakeries, they do bring a lot of new features to the table like high-tech payment options and iPads that provide product information, as well as a more developed rewards program.The Cedar Park location will also house two Austin companies, Easy Tiger and JuiceLand, as part of the Friends of 365 program.Click To Tweet
John Mackey, co-founder and CEO Whole Foods said the Cedar Park store will be a “2.0” version of existing 365 stores. “It’s going to have all these new bells and whistles that we’ve learned from our first three stores.”
Still, Whole Foods is facing its worst sales slump in more than a decade, which has led to the first decision to shrink the size of the chain in recent years. On Thursday, it was announced that while Whole Foods plans to open six new stores in the next quarter, there are also plans to close nine. The company, which has about 440 stores in the United States, also has abandoned an ambitious, previously-announced growth target of 1,200 locations as it tries to get expenses under control.
The closing stores are not entirely bad news, as strategies are in place to only close stores that will hopefully lead to growth of nearby stores.
However, six straight quarters of declining same-store sales have forced the company to reconsider several things, and are hardly a good sign.
Leases have been signed to open 365 stores in Oakland and Brooklyn in the future as well, and initial reviews of the open 365 stores are positive.