Home / Business / Amazon & # 39; s Whole Foods scraps the expansion of 365 smaller stores

Amazon & # 39; s Whole Foods scraps the expansion of 365 smaller stores



Whole Foods Market once had an ambitious plan to expand customer appeal with its 365 stores. But now it's saying goodbye to the cheapest and smallest store format.

Whole Foods general manager John Mackey told employees that the supermarket chain will no longer open new Whole Foods 365 stores, according to an internal email reviewed by Yahoo Finance. The 12 existing stores, the newest of which just opened in Atlanta in December, will remain in business.

Mackey said the main reason behind the change in strategy is Whole Foods prices. "As we have been constantly lowering prices at our main Whole Foods Market stores over the past year, the price distinction between the two brands has become less relevant," Mackey wrote on Wednesday. "As the company continues to focus on lowering prices over time, we believe that the price gap will decrease further."

"The learnings and innovations of 365 have been incorporated into Whole Foods Market and the company will continue to innovate and experiment," said a Whole Foods spokesperson in a statement.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Amazon has been & nbsp;Display of discounts and weekly offers.& nbsp; for Prime members who shop at Whole Foods stores. But in August, 40% of more than 2,000 buyers of whole foods & nbsp;surveyed by Yahoo Finance& nbsp; they said they believe that the prices of products in stores are not really lower. "data-reactid =" 19 "> Amazon has implemented discounts and weekly offers for the main members who buy at Whole Foods stores, but in August, 40 The% of more than 2,000 Whole Food buyers surveyed by Yahoo Finance said they believe that the prices of products in stores are not really lower.

Launched in 2016, the 365 stores feature Whole Foods private label products, including 365 Daily Value products, to attract shoppers who have avoided the premium stores that once came to be known as the full paycheck. After the Amazon acquisition, those brands have become increasingly available in the regular Whole Foods, Amazon.com and even Amazon Go stores.

The team would concentrate its efforts on growing the main brand of Whole Foods Market, according to the email. Employees who have been working for 365 will be integrated into other Whole Foods regions.

Brittain Ladd, CEO of Six-Page Consulting, said that the measure indicates that more private label products could reach Whole Foods stores, a common strategy for traders to lower prices in a business with narrow margins.

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(David Foster / Yahoo Finance)

Whole Foods set high expectations for its 365 stores. It was the effort of the premium retailer to attract the cost-conscious millennial buyers. In May 2017, a month before Amazon announced the acquisition of the chain for $ 13.7 billion, Mackey told investors that Whole Foods had 22 365 stores under development in the US. UU And that would increase that amount.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The interruption of the 365 stores occurs at the same time Whole Foods is planning a national expansion with the support of Amazon, Whole Foods is looking to open more stores in locations with more than 45,000 square feet and & nbsp;Eye sites that used to house retailers like Sears. "data-reactid =" 36 "> The interruption of the 365 stores comes at a time when Whole Foods is planning a national expansion with the support of Amazon, Whole Foods seeks to open more stores in locations with more than 45,000 square feet and eye sites that used to house retailers like Sears.

Meanwhile, Amazon has expanded its own footprint from smaller format grocery stores with Amazon Go. With a boxless payment experience, Amazon Go has grown to nine locations in the US. UU Last year.

"The leadership of Whole Foods Market made this decision independently and has no relationship with Amazon Go," said the grocery store spokesman, referring to the recall of 365 stores.

According to Ladd, the movement fits into Amazon's general grocery strategy. "Why do you need Whole Foods 365 and Amazon Go, when Amazon Go has the same amount of SKU (Stock Keeping Unit)? It was too confusing for customers, "he said." Amazon maintains a strategy where they have larger Whole Foods stores that provide a meaningful grocery shopping immersion experience, and Amazon Go is the fast and convenient store. "

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Krystal Hu covers technology and commerce for Yahoo Finance. Follow her on Twitter."data-reactid =" 40 ">Krystal Hu covers technology and commerce for Yahoo Finance. Follow her on Twitter.

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<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Amazon eyes closed Sears stores for the expansion of Whole Foods"data-reactid =" 43 ">Amazon eyes closed Sears stores for the expansion of Whole Foods

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