Whole Foods Stops Expanding 365 Stores

AUSTIN, Texas – Whole Foods Market is abandoning its smaller store format, announcing that it would no longer open new Whole Foods 365 locations, Yahoo! Finance reports. The 12 Whole Foods 365 in operations will remain open.

Whole Foods CEO John Mackey pointed to a shift in cost strategy for the company overall. “As we have been consistently lowering prices in our core Whole Foods Market stores over the past year, the price distinction between the two brands has become less relevant,” he said last week in a note to employees. “As the company continues to focus on lowering prices over time, we believe that the price gap will further diminish.”

Amazon, which owns Whole Foods, had been giving Prime members discounts and weekly deals at Whole Foods locations. The 365 concept focused more on the chain’s private-label products, such as 365 Everyday Value items, in an effort to capture the interest of cost-conscious shoppers not interested in the larger Whole Foods Market stores. When Amazon bought Whole Foods, more of the private label value products have migrated to Whole Foods Market locations, Amazon Go stores and Amazon.com.

“Why do you need both Whole Foods 365 and Amazon Go, when Amazon Go carries the almost same number of SKUs (Stock Keeping Unit)? It was too confusing to the customers,” said Brittain Ladd, CEO of Six-Page Consulting. “Amazon keeps a strategy where they have larger Whole Foods stores that provide a significant immersion experience of grocery shopping, and Amazon Go be the quick and convenience shop.”