No, you’re not dreaming. But one of your dreams may be coming true: Whole Foods Market, also known as “Whole Paycheck” for its high-priced food selection, says it’s opening up a new chain of stores with lower-priced, but (presumably) still healthy foods that have made the store such a destination over the last several decades.
The Austin-based company made the announcement yesterday as it delivered news of its first quarter earnings. The company says it is looking for new revenue sources and ways to reach the demographic of shoppers otherwise out of reach, including those in their 20s and 30s, and the shoppers buying value-priced organic items at Target, Trader Joe’s and Walmart, for example.
According to Whole Foods, the new stores will offer a “curated” selection of items in a simpler store design layout, but still honor the chain's commitment to clean foods.
“[W]e are excited to announce the launch of a new, uniquely-branded store concept unlike anything that currently exists in the marketplace,” Walter Robb, co-chief executive officer of Whole Foods Market, said in a statement. “Offering our 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.”
While the name of the Whole Foods spinoff has not yet been announced, the chain said it’s building a team to focus on the stores, as it’s already negotiating leases.
The target launch date is somewhere in 2016 with “rapid expansion” following the early store launches.
“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,” added Robb. “We look forward to sharing more details about this exciting new venture sometime before Labor Day.”
According to Whole Foods, for the 28-week period ended April 12, 2015, “total sales increased 10% to $8.3 billion.” But Fortune reports the news comes “amid new signs that Whole Foods’ fast growth engine is sputtering. The grocer reported same-store sales rose 3.6% in the 12 weeks ended April 12, below Wall Street expectations for 5.3% growth, according to Consensus Metrix, and a fraction of the double-digit growth in recent years that had made Whole Foods a Wall Street darling.”
Whole Foods' sales may be stalled but it's still an industry leader, driving brand awareness and category growth. In 2013 the chain announced its plans to provide label transparency on items sold in its stores that contain genetically modified ingredients by 2018. The chain said all categories in the store will be vetted and suppliers must comply with its labeling requirements denoting the presence of GMOs.
The chain also recently launched its produce rating system. Designed to help orient customers to their best produce options, the system identifies several criteria including information on the type of growing methods and responsibility practices—including farmworker welfare and management of resources.
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