Wednesday, February 27, 2019

[REPORT] All "365" Stores to be Converted to Traditional Whole Foods by End of Year

In a move that should surprise few, Whole Foods plans to convert all of its existing 365 stores into regular Whole Foods stores by the end of the year, according to a report by Yahoo Finance. The move follows the company's decision, made public in January, to stop expanding the smaller format stores.  According to a Whole Foods spokesperson, all twelve current Whole Foods Market 365 stores will remain open after the conversion.  
In Atlanta, the company opened two, ultimately the final two 365 stores ever, simultaneously, on December 12, 2018.  The stores, in Buckhead and near Decatur, anchor their respective centers.  In Buckhead, Regency Centers demolished a portion of Paces Ferry Plaza and a former Taco Bell restaurant to make way for the new approximately 30,0000 square foot grocer.  Near Decatur, S.J. Collins Enterprises, a frequent Whole Foods development partner, redeveloped two former car lots to create North Decatur Square, where the the 365 store occupies a 35,000 square foot space, making it the largest 365 store in the nation.  

The company has already scrapped the 365 specific website,  moving store listings to the main Whole Foods page, and is not actively updating the 365 facebook and Twitter pages.  

Typically, 365 stores are 25,000 to 30,000 square feet, smaller than conventional Whole Foods supermarkets, which average around 40,000 square feet.  

Whole Foods once seemed to indicate that the 365 format was the future, and the answer to the grocer's struggles in the marketplace.  However, since Amazon's $13.7 billion acquisition of the grocer in August 2017, those plans have changed dramatically.  One month prior to announcing the deal, Whole Foods co-founder and CEO John Mackey told investors there were twenty-two 365 stores under development.  Only nine opened since then.  Some of the previously announced Whole Foods 365 stores have already been turned into full-fledged Whole Foods stores, while others were scrapped entirely.

Last May, at Butler Town Center in Gainesville, Florida, Whole Foods opened a namesake 40,000 square foot store instead of a 365 store, as had been originally announced.  

This past November, Whole Foods finally filed for permits for a store at Kenwood Collection in Cincinnati, Ohio, more than three years after it was originally announced.  Local sources indicate that the company does intend to open the store, but likely not until later this summer/fall, when it will open as a full-line Whole Foods.   

In Evergreen Park, Illinois, a long delayed 365 store at Evergreen Plaza is slated to open March 6 as a Whole Foods Market.  

One store in Indiana and at least two stores in California were abandoned entirely.  

In October 2017, Whole Foods closed one of the original 365 stores in Bellevue, a suburb of Seattle, citing "weak performance," only one year after opening.  A judge initially ordered the store reopened finding the grocer's lease with its landlord was enforceable for at least the first 10 years of the grocer's 20 year lease. For over a year, a legal battle ensued and only this past December did an appeals court rule in favor of Whole Foods in not enforcing the lease and allowing them to remain closed.   

Mackey said the main reason to move away from the smaller, value-based store concept is the price drop at regular Whole Foods stores.  That said, a number of identical products are cheaper at 365 vs. regular Whole Foods stores and industry observers indicate that prices overall at the main line stores are once again on the rise following a few months of declines.  

GT's Kombucha, for instance, is priced at $3.49 per bottle at the Buckhead Whole Foods but only $3.29 at the Buckhead 365 store.  Identical frozen meals were also cheaper at the 365 store with those from brands like Saffron Road, Amy's and evol, among others, all an average 50 cents cheaper at 365 than at the main line store.  

The conversion of the Buckhead store was something that Regency was reportedly prepared for, knowing at the time of the construction that there was a real possibility that the store might not remain a 365 store.  The full line Whole Foods nearby is one of the most productive in the region and the additional store will surely help alleviate some of the stress it's under by drawing would-be customers from the neighborhoods closer to the current 365 store.  

The conversion of the Decatur area store is likely to be be met with tepid enthusiasm from the collective intown community given the grocer's imminent planned closure of their Briarcliff store, the company's original Atlanta area outpost.  Many neighbors have voiced their concern and frustration with the planned closure given its convenience and size, both ideal for intown dwellers.  

Both the Decatur and Buckhead locations were to get outposts of Los Angeles based Loteria Grill but after at least two delays, both restaurant sit idle.  Recently installed signage at both locations indicates an April opening but the conversions could further alter the restaurant's plans.  

Whole Foods plans to close the Briarcliff store in late March or early April, after which it will open its new multi-level, 70,000+ square foot "flagship" store at the corner of 14th and Spring Streets in Midtown, potentially as soon as April 5.  Team members at the Briarcliff store have been instructed to tell patrons that the store is "moving" to Midtown, a joke considering the roughly five miles between them.  It's a closure and an opening, calling it anything else is a false narrative.  

Are you a current Whole Foods 365 shopper?  Do you think Whole Foods prices have gone up after coming down previously?  Where do you do the majority of your grocery shopping?

Please share your thoughts below  


Anonymous said...

I love the new 365 store! Dang you amazon!!

Greenwave said...

Amazon is running Whole Foods into the ground. Every decision they have made since the acquisition has been bad. I am NOT going to drive from Druid Hills to Midtown or Decatur for overpriced goods.

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