Whole Foods Market plans to launch a new chain of lower-priced stores for people who can’t otherwise afford to buy its premium and organic food.
Fortune.com reports that the Austin, Texas-based company said Wednesday that stores in the new format would offer a “curated” selection and have a simpler design to cater to people who want Whole Foods quality without paying Whole Food prices, particularly customers in their 20s and 30s.
Whole Foods co-CEO Walter Robb said that the company is building a team that will be dedicated solely to this project and that it already is negotiating leases to build a chain, whose name was not disclosed. He said the new chain could eventually be as big as the original 373-store Whole Foods, according to Fortune.
“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 price,” Robb said in a statement. “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.”
Executives on a call with Wall Street analysts spoke of increasing the “accessibility” of organic food.
More details will come by early September, Robb added. The grocer plans to start opening its first stores in the new format next year, with a quick expansion to follow.
The news comes amid new signs that Whole Foods’ fast growth engine is sputtering, Fortune reports. The grocer reported same-store sales rose 3.6 percent in the 12 weeks ended April 12, below Wall Street expectations for 5.3 percent 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.
What’s more, little improvement seems imminent: same-store sales in the current quarter through May 3 were up 2.8 percent. Shares fell 12 percent in after-hours trading, adding to a 17 percent decline from recent highs.
Whole Foods’ performance was particularly disappointing to investors because the company had cut prices on fresh produce and other items to attract new customers who balked at its pricey selection, and rolled out its first-ever national advertising campaign.
Nine new store leases announced
In other Whole Foods news, the grocer said Wednesday that it has signed leases for nine new stores.
The stores are planned for Atlanta (two locations); Birmingham, Michigan (relocation); Houston, Texas; Jacksonville Beach, Florida; Park City, Utah; Rochester, New York; and Washington, D.C. (two locations).
Whole Foods currently operates 417 stores and has 113 stores in development.