Whole Foods to launch new line of stores next year
Whole Foods Market Inc. has announced its decision to launch a new line of stores that will offer their own brand and products at value prices. Planned to target millennials, the new stores will start coming up next year. The company stated that the new shop will offer their own brand and the offered products would be sold at value prices.
Whole Foods is facing a decline in sales at its supermarkets. It is facing stiff competition and losing customers to retailers like Kroger Co. and Wal-Mart Stores Inc. These stores are increasing their offerings in organic and local- produce. The increased product badly affected Whole Foods' second-quarter sales. It brought a decline in analysts' estimates and also, a big decline came in the company's shares.
Whole Foods shares declined as much as 12% to $42.10 after the second quarter results were released. Profit in that period was $3.65 billion, but analysts had projected $3.7 billion. Comparable-store sales growth reduced to
3.6% in the quarter in comparison to 4.5% in the previous quarter.
Now, the new millennial-focused concept is to get budget-minded customers into the shops. "We believe the growth potential for this new and complementary brand to be as great as it is for our highly successful Whole Foods Market brand", affirmed co-CEO Walter Robb.
Whole Foods said that it's preparing a new team that will handle the new stores and also, negotiate leases. The new stores will have a modern design coupled with innovative technology. The retailer said that it is planning to share more details on the plan before September 7, 2015.
"We've been so successful that we've actually bred a lot more competition and everyone is jumping on the natural and organic food bandwagon, and that's really, frankly, due to our success", said CEO John Mackey.
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