Whole Foods is planning to launch a smaller, less expensive chain of stores to cater to millennial shoppers, executives announced on Wednesday during an earnings call.
The company’s co-CEO Jeff Mackey said the new chain, which has not yet been named publicly, would be focused on cheaper products but with less selection, to appeal to millennials looking for healthy food.
“It will offer a convenient, transparent, and values-oriented experience geared toward millennial shoppers,” said Mackey. “We plan to begin opening stores next year, and given the more standardized design and product assortment, we expect a fairly rapid expansion from there.”
The Austin, Texas-based brand has a reputation as “Whole Paycheck”, owing to the lofty prices of its vast organic and natural foods selection, though it pays its workers better than most grocery chains, $18.89 an hour in 2013.
At the same time, as it develops the new chain with “streamlined design, innovative technology and a curated selection” in mind, the health food store is hoping to triple the number of Whole Foods Markets in the US to 1,200.
Hoping to ease concerns that shoppers would simply turn to the less expensive new chain, Mackey said it was “an ‘and’ to our Whole Foods Market brand, and not an ‘or’.”
Nevertheless, the store’s stock price suffered yesterday following the quarterly earnings report on Wednesday, and Mackey fielded questions about whether less expensive products would eat into the company’s existing market. The company’s stock price also took a 10% hit after the chain reported lower earnings than analysts expected, the Associated Press reported.
