Whole Foods plans to lure millennials by opening a new chain of stores focused on low prices and innovative technology. The move was announced Wednesday by the company’s two CEOs during a conference call.
According to founder John Mackey, the new switch is aimed at reviving declining sales, airbrush the company’s image, and attract a broader audience which other natural food suppliers often fail to properly address.
Although some investors complained that the plan may “cannibalize” the main chain’s sales, Mackey was confident that Whole Foods could soon more than triple its locations across the U.S.
The chief executive also told investors that he was already working toward building a team solely dedicated to the new concept, while negotiating with potential leasers. The new stores are expected to open sometime in 2016. Moreover, the company plans a “fairly rapid expansion” soon afterwards.
Millennials are usually defined as people who were born between 1980 and 1999 or reached their maturity at the turn of the new millennium. Although in the U.S. alone there are more than 80 million people that fall under this category, they are very elusive and traditional advertisements often fail to send a significant message to them.
According to a White House report, millennial generation was shaped by technology since some of the major advances happened just before millennials’ eyes including the Internet and the dawn of personal computers. Although, they are often depicted as technology addicts, they are not that great spenders since their artistic, less business-oriented side usually does not work to their financial advantage.
Some of them are portrayed as still living with their parents after hitting adulthood, while others cannot afford a home so they usually spend their family’s finances on housing. Yet, they are environment-oriented, very informed and often picky produce buyers.
So a mix of cutting-edge technology, appealing designs, and low prices may just be the recipe for success in luring this category of customers. Walter Robb, the company’s co-CEO, said that the new stores will court young people with “modern, streamlined design, innovative technology and a curated selection.”
However, the two CEOs didn’t disclose the name of the new stores. They only said that more details will be available before fall.
Whole Foods which runs more than 400 stores recently experienced sluggish sales amid fierce competition and lack of interest in its products. As a result, the chain tried to draw a line between itself and competitors through clever marketing strategies. For instance, it recently launched a line of products ranked according to their environmental impact and partnered with Instacart for faster grocery deliveries.
Moreover, the company tries to get rid of its “Whole Paycheck” stigma by struggling to keep prices as convenient as possible. Yet, investors fear that the push may seriously affect its overall profit.
Since the new chain may further impact profits, Whole Foods’ CEOs reassured shareholders that the problem would be offset by more customers and larger sale volumes.
Its two executives also disclosed that the chain will use its current distribution network to supply the new stores.
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