business news in context, analysis with attitude

Barron's has a story about how Whole Foods is finally - almost two years after it first announced the format - "starting to accelerate one of its most important initiatives: its lower-priced '365' stores."

While only three currently are open - in California, Oregon and Washington State - " there are 23 stores in development, according to Whole Foods, and the next one is set to open in April. Certainly, the lower-priced stores are no panacea for Whole Foods, whose approximately 465 standard stores are still the company’s core. But the smaller-format 365 stores could add a much-needed boost, leveraging Whole Foods brand name and its logistics network to expand its shopping base. The danger is that the new stores could draw shoppers away from traditional Whole Foods markets, but it’s worth testing the concept on a larger scale, some analysts say."

But the story also suggests that Whole Foods hasn't got a lot of room for error: "With Amazon.com pushing more aggressively into the grocery world, Whole Foods needs to find new innovative ways of drawing customers unfamiliar with the brand. The 365 rollout can’t come soon enough."
KC's View:
Sure, Amazon is competition to take seriously, but I'd also be thinking about companies like Sprouts and Lucky's Market and all the other retailers that do a helluva lot better job marketing and merchandising healthy products than they did even just a few years ago. In some ways, i wonder if it has taken a little too long to get this format off the ground ... and I wonder if they have it right yet. I wasn't wild about the one I've seen, and I'll be curious to see what changes they've made going forward.