Whole Foods plans mini-store chain
Whole Foods Market chain is looking to spin off a chain of small-scale stores.
The Texas-based Whole Foods Market chain, which has been widely imitated in other countries by market-style gourmet grocery stores, is looking to spin off a chain of small-scale stores.
These will offer organic and natural foods at lower prices than its namesake outlets, a bold gambit to accelerate the chain’s sales growth.
In announcing the new format, to be unveiled in a few months, executives say it will be “hip,” “cool” and “high-tech,” with stores that are smaller and less costly to operate than its traditional outlets, which average 38,000sq ft, the equivalent of about 13.5 tennis courts.
If it succeeds, Whole Foods could win over younger, cost-conscious consumers now put off by its array of pricey items. The new – and as yet unnamed – chain will have to draw in new customers and not at the expense of its more than 400 namesake stores, analysts says.
“We’ve never seen a food retailer operate an entirely new format successfully, especially one that is so different,” Barclays analyst Meredith Adler says.
Big and small chains have imitated the Whole Foods model, with the likes of Wal-Mart Stores and Kroger adding natural-and-organic offerings. Whole Foods reported sales of $US14.19 billion in its last fiscal year, up 9.8% from its fiscal 2013 revenue.
Patent activity gives an indication of possible names. Among those Whole Foods has filed to trademark in the past week are Dailyshop, Clever Egg, Small Batch and Greenlife.
NBR Food Industry Week
Fri, 15 May 2015
Fri, 15 May 2015
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
Whole Foods plans mini-store chain
47567