AMZN Amazon.com Inc

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)

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