Whole Foods to Close Smaller-Format Store
October 13 2017 - 3:42PM
Dow Jones News
By Heather Haddon
Whole Foods Market is closing one of its new smaller-format
stores a year after it opened, in another acknowledgment that the
natural grocer is trying to move more nimbly to keep up with
mounting competition.
The "365 by Whole Foods" store in Bellevue, Wash., will close on
Saturday. It opened about 13 months ago in a mall in a city
adjacent to Seattle, where Whole Foods' new owner, Amazon.com Inc.,
has its headquarters.
The Bellevue store will be among the most short-lived Whole
Foods locations in the company's nearly 40-year history. Analysts
say that in part reflects the company's increasing willingness to
cut its losses on locations that aren't working.
Amazon could encourage Whole Foods to take that strategy further
given the e-commerce giant's own track record of experimentation,
said Kevin Coupe, a retail analyst and author of a grocery industry
newsletter.
"This fits with Amazon's approach to try lots of stuff, but if
something isn't working, get out quick and move on," Mr. Coupe
said.
A Whole Foods spokeswoman said executives decided to close the
store before Amazon took over Whole Foods in August. Employees at
the store will be offered jobs at other stores, she said. She said
Whole Foods is still committed to the 365 format, which offers a
smaller selection of cheaper goods than the grocer's standard
stores. Whole Foods will still operate five 365 stores after the
closure, and has plans to open two more in San Francisco and
Brooklyn.
Grocery industry analysts have given the smaller stores mixed
reviews. Some, like the one in the Silver Lake neighborhood of Los
Angeles, have attracted a loyal following. Others have problems,
including the one that will close in Bellevue.
"It's a testing ground. That's the real value for them," said
Rupesh Parikh, a senior analyst for Oppenheimer & Co. Inc.
After fighting sluggish sales for more than a year, Whole Foods
executives said in February that they would shut nine stores, the
largest round of planned closures in its history. The company also
abandoned plans to nearly triple its store count.
Amazon has slashed prices on Whole Foods goods and started
selling Whole Foods store-brand products online. An estimated $1.6
million of Whole Foods brand products were sold in the first month
after Amazon began offering them.
Write to Heather Haddon at heather.haddon@wsj.com
(END) Dow Jones Newswires
October 13, 2017 15:27 ET (19:27 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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