Whole Foods to ease away from their cheaper “Whole Foods 365” stores

Austin

AUSTIN (KXAN) —  Austin-based grocery chain Whole Foods will ease away from its “Whole Foods 365” store concept, designed as a smaller, money-saving store. 

Yahoo Finance first reported that Whole Foods CEO John Mackey sent an internal email to employees saying that the company would not open any new Whole Foods 365 stores. The email, (which Business Insider has posted) clarifies that all of the twelve current Whole Foods 365 stores will remain open and no employees will be out of a job as a result of this move. 

In this email, Mackey said that 365 stores were intended to offer less expensive options and a “streamlined shopping experience.”

“However, 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,” Mackey said, noting that he believes the gap between 365 and the rest of Whole Foods in terms of price would continue to shrink.

“As a result, we have decided that it’s in the best long-term interest of the company to concentrate our efforts on growing the core Whole Foods Market brand moving forward,” he said in the email.

The email noted that Whole Foods 365 President Jeff Turnas will, “spend the coming weeks ensuring all 365 operations are smoothly transitioned to the respective regions and continue his work leading special projects, including new store format development, until he transitions into a new role within the company.”

Austin area impact

One of the existing 365 stores is in the Austin area, in Cedar Park. 

Mike Rheinheimer went there to grab a treat with his son Monday, he explained that the convenient location of the store is the main reason why he shops there.

But he said he doesn’t notice much of a difference between the 365 store and a Whole Foods Market store. 

“The one item we find that they’re priced competitively on is milk,” Rheinheimer said. “I will say, I like the beer selection.”

Autumn Biedermann was also shopping at the 365 store in Cedar Park, she said she goes there when she needs to make a quick trip to get just a couple of items. 

“Just being able to get in and get out in a few minutes and find the things I need without the hassle of a big parking lot or standing in a long line, that’s what I’m looking for,” Biedermann said. 

“I don’t have to fight HEB traffic, the HEB in Leander has gotten –it’s crazy,” she added.

Austin was slated to get a 365 store in the coming years at the new mixed-use Plaza Saltillo development east of I-35, occupying the first few blocks of East 4th Street and East 5th Street. 

Pio Renteria, the Austin City Council Member who represents that area, had previously said that his constituents there wanted to see more options for fresh fruits and vegetables. His staff members said Monday that he is excited about a new grocery store going in there. 

Endeavor, the developer of Plaza Saltillo, confirmed Monday that a grocery store would still be going in at the Plaza, but it would not be a Whole Foods 365 store. 

“We spoke with executives at Whole Foods and they remain committed to opening a full-line Whole Foods Market at Saltillo. Endeavor remains excited to bring a grocery store to the community,” said Jason Thumlert, principal with Endeavor.

Construction is currently underway at the Plaza Saltillo site where that store will go in. Previously, Endeavor told KXAN back in early 2018 that construction is expected to wrap up in 2019 or 2020. 

Whole Foods was bought out by Amazon back in June of 2017 and has since introduced price cuts including discounts for Amazon Prime members. Recently the Wall Street Journal reported that Amazon is aiming to build and expand Whole Foods stores across the U.S. 

Whole Foods did not respond to KXAN’s requests for comment.

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