Whole Foods is launching 365 by Whole Foods Market in hip Los Angeles neighborhood Silver Lake on May 25, to be followed by openings in Bellevue, WA; Houston, TX; Portland, OR; and Santa Monica, CA.
The new concept is to offset Whole Foods’ image of being too costly and is an invitation to a new generation of shoppers accustomed to healthier and affordable food options.
“We are excited to introduce 365 by Whole Foods Market to bring healthy foods to even more communities with a fresh, quality-meets-value shopping experience that’s fun and convenient,” said Jeff Turnas, President of 365 by Whole Foods Market, in a press release. “A modern, streamlined design with innovative technology and a carefully curated product mix will offer an efficient and rewarding way to grocery shop.”
The 365 locations are about half the size of a typical Whole Foods Market, offering more prepared food choices but fewer items than the standard store.
“We want it to appeal to a wider audience,” said Turnas, in Bloomberg. “This model allows us to compete with everybody in the market.”
That market has exploded since Whole Foods popularized organic food, prepared meals and craft beer in its first Austin, Texas, store two decades ago. Since then, competition from Kroger, Wal-Mart and Costco has undercut Whole Food’s prices to the point that last year its sales growth slowed to 2.5 percent and shares slid 34 percent.
Scott Mushkin, Wolfe Research analyst, told Bloomberg the 365 rollout is a “sign of the company’s search for answers. The company has lowered prices, remodeled stores and launched a national advertising campaign all to no avail as sales continue to slip.”
The lure for millennial shoppers in the 365 model is not just cheaper prices but a greener sensibility. Leftover food will go to food banks, scraps will be composted, all lighting is LED and refrigeration cases will run on CO2 generating a lower carbon footprint than typical refrigerators.
“I’ll think we’ll be able to get more and more sustainable,” said Turnas, in Fast Company. “The good thing about the 365 stores is that they are meant to be a little bit more consistent in the layouts and the design and build, so it allows us to make decisions that are going to be the same for every store going forward.”
The launch is a big bet from the company. “Our hope is that, as we grow, we can put these  stores all over, and put them in places where Whole Foods would never be able to go,” added Turnas.
There’s a Parking Lot Party scheduled for Sunday, May 22, for the Silver Lake opening featuring top local food trucks, Kogi BBQ, Yeastie Boys, Coolhaus, Border Grill and Allegro Coffee House, free samples from 365 suppliers, games and live musi. Non-profit rescue Wags and Walks will have adoptable dogs and a puppy photo booth.
“You have to be willing to do what it takes to serve your customers better,” said Mackey when 365 was announced last year. “We see this as a huge opportunity. We intend to continue to be the leader in this category for the rest of this century, so we are evolving with the marketplace.”