Whole Foods, a grocery store chain known for its organic and natural foods selection, is opening a separate chain of stores that promise lower prices targeting younger shoppers, the latest in a series of attempts to shed its reputation as an expensive grocery store.
Executives announced plans Wednesday for the new, still unnamed chain, which will open in 2016. Walter Robb, co-CEO for the Austin, Texas-based chain, said the stores will have a “modern, streamlined design, innovative technology and a curated selection.”
Whole Foods hopes to attract millennials, but also “anyone looking for high-quality fresh food at great prices,” Robb said in a statement.
The announcement came during a conference call about the chain’s second quarterly earnings. During the same call, it was revealed that Whole Foods’ same-store sales fell short of expectations, The Wall Street Journal reported.
As mass retailers, such as Wal-Mart, started taking a stab at the organic foods market, Whole Foods earned the nickname “Whole Paycheck” for its high-priced selection. In 2012, the Journal reported that core customers spent “on average, nearly three times more than new customers.”
Recently, Whole Foods started cutting prices to win back customers that were turned off by the chain’s high price tag.
“Analysts worried that the new store concept seemed to further signal that Whole Foods’ high-end grocery model is faltering, raising questions about how it affects the company’s long-term growth plans,” the Journal reported.
Whole Foods said the company is securing leases for the new stores. In all, Whole Foods has 417 stores across the country and said it sees demand for as many as 1,200 stores in the future.