Whole Foods' new 365 store concept to debut in Los Angeles
Austin, Texas -- Whole Foods Market on Wednesday posted disappointing third quarter earnings and revenue, but it also gave out some more details about its new, value-driven store concept.
The company revealed that it will debut the format, 365 by Whole Foods Market, in the second half of next year, with the first store opening in the Silver Lake section of Los Angles. It plans to open up to five 365 stores (all in the second half of next year), with the expectation of doubling the number of openings in 2017. Stores will average about 30,000 sq. ft.
Whole Foods said it recently signed leases for four 365 store locations: Los Angeles and Santa Monica, California; Portland, Oregon; Houston; and Bellevue, Washington. (The leases reflect stores scheduled to open through 2017.)
“We are really excited about the progress we have made with securing real estate in markets where there is high demand for both quality food and value in a convenient format,” said Jeff Turnas, president of 365 by Whole Foods Market. “Our first opening will be in the Silver Lake area of Los Angeles, which we think is an ideal community to bring a modern shopping experience that draws from the best innovations of Whole Foods Market stores and gives them a new expression.”
Despite coming in below quarterly estimates, Whole Foods sees demand for more than 1,200 stores in the United States, and the chain said it is taking the right steps to position itself for the long term.
The retailer posted a same-store sales increase of 1.3% for third quarter ended July 5; analysts had expected a 3% increase. Total sales increased 8% to $3.6 billion. Net income increased 2% to $154 million
"In this rapidly changing marketplace, we believe we are taking the necessary steps to position ourselves for the longer term," said Walter Robb, co-chief executive officer of Whole Foods Market. "We remain focused on innovating and evolving to best serve our customers' diverse purchasing preferences. From the unique experience of our Whole Foods Market stores, to our growing online channel for home delivery, to the exciting launch of our 365 by Whole Foods Market stores, we are making investments to extend our reach to both new and existing customers."
Whole Foods currently has 424 stores. It expects to cross the 500-store mark in fiscal year 2017. Longer term, the company sees demand for more than 1,200 Whole Foods Market stores in the United States. The company's new 365 format expands the growth opportunity beyond 1,200 stores.