NEW YORK -- Whole Foods said Thursday that it will name its new chain of smaller stores with lower prices after its "365 Everyday Value" house brand.
Co-CEO Walter Robb said the chain will be named 365 by Whole Foods Market, a nod to the brand already sold by the grocery chain.
He said that while 365 products will anchor the stores, the chain also will have other items, including national brands.
Since announcing plans for the chain in May, recent trademark filings by Whole Foods Markets Inc. had prompted speculation that the stores might bear names such as Clever Egg, DailyShop, Greenlife, Small Batch or Swiftgoods.
"Those were all decoys," said Robb, before adding that his claim could also be a decoy to divert people about other plans.
The new chain, which is to begin operating next year, comes as Whole Foods seeks to set itself apart from its competition. The company, which has more than 400 Whole Foods stores, has seen its sales growth slow as organic and natural products have become more widely available at mainstream supermarket chains.
The new chain also may be inspired by the success of companies such as Trader Joe's and Sprouts, which also focus on value and store-brand products, said Jon Springer, retail editor for the trade publication Supermarket News.
"They've identified millennial shoppers, younger shoppers who are very particular about what they eat, but also tough about what they can spend on food," he said.
Executives in the supermarket and retail industry are trying to adapt to the changing ways people are shopping. Wal-Mart Stores Inc., for instance, has been opening Neighborhood Market stores that are smaller than its supercenters aimed at shoppers who want to get in and out quickly.
A similar philosophy seems to be behind the plan by Whole Foods. In its initial announcement, Whole Foods had said the new chain would be "geared toward millennials." But Robb said that while 365 is inspired by younger generations, it's intended to appeal to anyone who wants a quick, convenient way to shop.
Jeff Turnas, a Whole Foods veteran who was named president of the 365 chain, said he envisions people shopping at 365 stores when they want to get in and out quickly, with the regular Whole Foods stores being destinations for bigger shopping trips.
Turnas, who previously headed the U.K. business for Whole Foods, also noted that a small Whole Foods location in London has an open-kitchen feel in its prepared food section. Turnas said something similar might pop up in the 365 stores.
Whole Foods said it plans to open between five and 10 of the 365 stores around the country next year, and it sees potential for the chain to eventually have as big a footprint as its namesake chain. The company, based in Austin, Texas, has provided few other concrete details about its plans for the chain.
In an earnings conference call in May, co-CEO John Mackey had described it as a "streamlined, hip, cool technology-oriented store, unlike any store anybody has ever seen before."
When asked this week what 365 stores will look like, Robb was vague. He asked that people close their eyes and "stay with me on the words and flow" of his description. He then proceeded to ask people to envision a place "that's fresh, that's clean" with a smaller, more neighborhood feel, a "streamlined" selection and "technology woven in," although he declined to say what type of technology.
But despite the bigger focus on value, Robb stressed the products in the 365 stores will have the same quality standards as "the mother ship."
"It's not going to be a dumbed-down thing," he said.
Business on 06/12/2015