Whole Foods Market to open 38 to 42 stores, refresh 200 existing units in 2015

New York -- Whole Foods Market has set itself an ambitious agenda for 2015 with 38 to 42 new store openings, including relocations, for annual square footage growth of 9% to 10%. The company, which currently has 408 stores, remains committed to tripling its U.S. store count to 1,200 locations over the long term.



On Wednesday Whole Foods released its results for its first quarter, ended Jan. 18, during which net income rose 5.7% to $167 million. Sales jumped 10.2% to $4.7 billion, and same-store sales rose 4.5%. On a quarterly conference call with investors, co-CEO Walter Robb noted Whole Foods is on track to complete 200 stores refreshes, primarily décor based, by yearend.



“While results vary depending on the scope of the project and a variety of other factors, stores typically see an immediate sales lift,” Robb said. “And we expect these investments to be one of the many factors contributing to sales momentum this year and beyond.”



And while many retailers are downsizing formats, Whole Foods is thinking big again, with its new sweet spot somewhere between 40,000 sq. ft. and 50,000 sq. ft.



Robb said the company will expand the pilot of its “affinity” (loyalty) program to its Washington, D.C., customers this spring, with hopes of taking the program live chainwide for 2015 holiday season. The program is a combination of card and app, according to Robb.



“We're using the term affinity, as opposed to loyalty, to try to suggest that we're going to create an experience that's resonate with our brand that's more than just a pedestrian thing,” he explained. “But actually, additional benefits, additional loyalty, curating some sort of an individual relationship with the customer.”



In regards to the chain’s 15-city partnership with Instacart, average weekly online delivery sales since September have passed the $1 million mark, and been as high as 5% of total sales at some stores.



Robb said Whole Foods intends to expand the program to additional markets and expand its product offerings.



On the same call, Whole Foods VP of operations Kenneth Meyer said the retailer is currently redefining its business processes, “and laying in the technology into that to create the new set of operating practices related around the front end and customer service.”



In response to a question regarding pricing on more commodity type items, Whole Foods founder and co-CEO John Mackey said the company has no interest in being perceived as a low-priced retailer.



“That's a valid niche in the marketplace is to try to be the low-priced, low-cost operator,” he said. “But that's not Whole Foods' strategy. Our strategy has always been about the quality and the service and the selection. And, competition is harder today than it used to be, but on the other hand, Whole Foods is a lot better today than it used to be.”