Can Whole Foods Market shake the “Whole Paycheck” image?

365 By Whole Foods Market365 By Whole Foods Market

Whole Food Market is the nation’s leading natural and organic foods supermarket. The company operates in the Grocery store: health food store industry. It claims to “maintain the strictest quality standards in the industry” and “an unshakeable commitment to sustainable agriculture”. In fact, it has trademarked the name “America’s Healthiest Grocery Store™”.

The company was founded in 1980 and is headquartered in Austin Texas. It employs 91,000 employees and has 437 stores in the United States, Canada, and the United Kingdom.

Providing the highest quality foods that support health and well-being are among the company’s top priorities. The company carefully evaluates each and every product sold in its stores to ensure that it is organically grown, fresh, wholesome, safe, and free of artificial preservatives, colors, flavors, sweeteners, and hydrogenated fats.

However, The company has a “Whole Paycheck” image that’s hard to shake while mainstream grocery retailers such as Walmart and Kroger are embracing organic foods and offering them at lower prices. Its higher-prices strategy coupled with increased competition and a growing trend of specialty health food retailers such as Trader Joe’s and The Fresh Thyme opening smaller neighborhood market stores, has recently resulted in declining same-store sales. Traders Joes’ success serves as a model as their stores occupy less space than a typical Whole Foods Market flagship store but has double the sales per square foot.

To shake its“Whole Paycheck” reputation, improve its price-value image, bring in more shoppers, and help it compete with other retailers, the company now offers more discounts on frequently-purchased products. However, executives have vowed not to get pulled into a price war, arguing that it’s customers are willing to pay a premium for superior food and service. Yet they recognize that there are current and prospective customers who appreciate the Whole Foods experience but are not willing or able to pay premium prices.

Thus, in May, 2015 the company announced the launch of a lower-priced spin-off called “365 by Whole Foods”. “365” in the name refers to the company’s “belief that fresh healthy foods can be readily available to more people in an affordable way every day…365 days a year”. 365 also refers to their popular “365 Everyday Value” brand which was designed to deliver the company’s strict quality standards at a competitive price. According to company insiders, customers seek out the 365 brand for its quality, transparency and great value. These same attributes define the less-expensive, smaller-store format.

The lower-priced stores will target a wider demographic – including millennials – and help meet the exploding demand for high-quality, natural and organic foods in a smaller-store format and at an affordable price. The streamlined design will be modern and consistent, include innovative technology and a carefully chosen product mix to ensure an efficient, fun, unique, convenient and overall rewarding shopping experience. To provide shoppers with added convenience, the 365 by Whole Foods Market stores will offer online ordering and delivery services through Instacart.

“In some ways we think (the 365 stores) represent the future for where Whole Foods Market will be evolving. …People are going to take a very different perception of our company.” (

– co-founder and co-CEO John Mackey

“We have assembled an amazing team of people who have been working tirelessly to create an innovative shopping experience that will appeal to new and existing Whole Foods Market customers” (
– Jeff Turnas, president of 365 by Whole Foods Market

The company decided to launch a new chain of stores instead of going after a more price-sensitive customer with its flagship brand because “they don’t want to water down their high-end brand or participate in a race to the bottom to gain share”. Thus, the 365 store concept is “the company’s ‘competitive response’ to aggressive pricing tactics from some of its competitors”. Beth Kowitt

The first 365 by Whole Foods Market opened in the Los Angeles suburb of Silver Lake, California May, 2016. The company plans to establish 13 stores by year-end 2017 in different places and variant-sized markets to get an idea of which types of markets are most receptive to the concept. The average size store will be 30,000 square feet, as opposed to the 40,000 to 50,000 square feet for traditional Whole Foods stores. Claudia Grisales

Other planned store locations include:

• Lake Oswego, Oregon

• Portland, Oregon

• Bellevue, Wash (suburb of Seattle)

• Cedar Park (near 183-A and New Hope Drive)

• San Francisco

• Concord, California

• Santa Monica, California

• Claremont, California

• Los Alamitos, California

• Evergreen Park, Illinois

• Cincinnati, Ohio

• Gainesville, Florida

• Houston, Texas


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