Whole Foods planning more 365 stores
Whole Foods Market 365 — its parent company’s answer to Trader Joe’s — hasn’t gotten a ton of press lately, but plans are in place for the organic grocer to continue rolling out more of its new concept stores.
The smaller store format, which focuses on Whole Foods’ private label and markets itself as more price competitive than, say, its parent company’s full-line locations, opened in Brooklyn, NY, this week. The new space is the chain’s first on the East Coast — seventh overall — with 16 others planned around the country, according to the 365 site.
The Brooklyn store is located next to an Apple store and represents the second generation of the concept. Jeff Turnas, who leads the 365 business, told Bloomberg that the company is happy with the store layout and is focusing more on nailing product selection in each location. Among the changes made has been the addition of more bakery items and a butcher in each store. Operating costs may be slightly higher as a result of the changes, but the returns based on increased service levels have warranted the investment.
While Whole Foods has chosen standalone locations for its 365 stores, speculation remains that the concept may move inside some Kohl’s locations as the relationship between that chain and Amazon.com deepens. Amazon opened 10 shops of its own products inside Kohl’s in Chicago and Los Angeles in time for Christmas. Eighty-two Kohl’s stores in the same markets also began a test accepting product returns for Amazon.
Last month, Kevin Mansell, CEO of Kohl’s, said the department store retailer is looking for partners from the convenience and grocery channels to fill open space in about 300 stores it has “right-sized” over the past several years. In addition to lease payments for the space, Kohl’s believes its business will benefit from the traffic that comes with having a grocery store inside the available locations.
It’s positioned a block away from Atlantic Terminal, a major transit hub served by multiple subway lines and the Long…
Posted by RetailWire on Friday, February 2, 2018
- Stores – Whole Foods Market 365
- Whole Foods’ 365 Offshoot Moving Ahead Under Amazon Ownership – Bloomberg
- NYC’s First Whole Foods 365 Opening: Long Lines, Cheap Avocados, and a Whole Lotta Cowbells – Grub Street
- With stores going dark, Whole Foods looks to fill retail’s gaps – CNBC
- Kohl’s to share space with grocery store partner(s) – RetailWire
DISCUSSION QUESTIONS: What changes do you expect in future generations of the Whole Foods Market 365 concept? How will 365 affect sales at mainline Whole Foods stores? Do you think it makes sense for the chain to move into Kohl’s?
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12 Comments on "Whole Foods planning more 365 stores"
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Chief Executive Officer, The TSi Company
I don’t think we need another grocery chain competing for a continually smaller piece of the pie. If Whole Foods planned to eliminate their main brand in favor of their new 365 stores, then I would agree. But shouldn’t Whole Foods concentrate on making their main brand as successful as possible before investing in another concept? Since Amazon took over Whole Foods, we have read about many issues taking place like items being out of stock, which does not make the customer happy. Focus on what you have and make it the best it can before tackling something new.
However I do like the idea of a partnership with Kohl’s, whether it be a hybrid of Whole Foods’ main brand or their new 365 concept. Now we’re acting smart — what does Kohl’s know about food? Not much. So bringing in a partner that is already in the food business is smart and makes keen business sense.
President, Integrated Marketing Solutions
Amazon + 365 + Go is a recipe for store reinvention. The amazing thing about Amazon’s innovation curve is that it is both iterative and cumulative. The first Go store is not the final format for Amazon convenience. Nor is the expansion of the 365 concept the final iteration of Whole Foods for urban environments.
Rest assured that Amazon’s deep capacity to learn by testing will rapidly evolve to a number of hybrid formats that are the epitome of customer-centricity. A 365 store opening next to Apple, that can fit in a Kohl’s, should be striking fear in the board room of every retailer.
Co-founder, CART
I’m with Chris. Amazon’s ability to test, learn and iterate will no doubt roll into new concepts through Whole Foods. Look for them to continually combine technology with new formats and I bet they’ll find several winners.
Strategy Architect – Digital Place-based Media
Shopper experience has to be central to strategy. Do smaller stores make sense? Absolutely. Co-location? Absolutely. New locations and footprints? Absolutely. The guiding question must be, “what satisfies consumer needs?”
Managing Director, GlobalData
In essence, 365 is a response to the fact that the mainstream Whole Foods proposition has problems. Rather than solve those problems, the company elected to develop a new format.
To be fair, a multi-format approach makes some sense when targeting a range of customer segments, or when covering locations with different needs. However, the first iterations of 365 were not particularly impressive, nor did they show much forward thinking.
I expect Amazon will shake things up a little, and may even look to blend the best of their own Go format with the good points of 365.
Principal, Retailing In Focus LLC
Managing Director, Regency Analysis
Co-location is definitely the way to go. It’s happening a lot in the U.K. right now with supermarket chain Sainsbury’s acquiring homeware retailer Habitat and opening concessions in their grocery stores. But then supermarkets have been selling clothes and homewares for years, so it’s not that big a surprise. And it works both ways round. Marks & Spencer has been doing it for years. Many of their outlets have small Simply Food branches inside their stores — you just walk from browsing clothes straight into buying your groceries. Both sides of the business benefit, and we’re going to be seeing different brands partnering much more frequently from now on.
Managing Director, GlobalData
Marks & Spencer has been selling food alongside non-food since 1931! It is now a significant proportion of the business and is, in growth terms, far more successful than their lackluster clothing division.
Although it’s a slightly different proposition, Marks & Spender trounces Whole Foods in terms of quality, taste, food innovation and many other factors. So does UK chain, Waitrose. In fact, I honestly don’t think Whole Foods is all that great. It’s very overhyped in my opinion! Wegmans on the other hand, now there’s a supermarket….
Retail Strategy - UST Global
Why draw the line at food? Perhaps add a little hardware, maybe some name-brand tools and, for those really oversized stores, a few of those must-have washing machines? At what point does a department store trying to be a shopping mall fail at both?
Content Marketing Strategist
CFO, Weisner Steel
IIRC, nobody here thought much of Kohl’s hybridization plans for groceries, in general, and 365, in particular, seems an even odder fit, at least as far as their respective target demographics go (or perhaps as I perceive their target demos to be).
But everyone involved has lots of time and money, so I wouldn’t be surprised to see a few tests run. What they will do with the result of those tests of course remains to be seen. Though Amazon is always quick to jettison ideas it doesn’t like, it’s often hard to determine what “doesn’t like” looks like. Profitability — at least in the short term — doesn’t seem to be the primary metric.
President, Co-founder, RetailWire