Yahoo Finance A Progress Report on Whole Foods’ Key Initiatives
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An update on Whole Foods’ key initiatives
Whole Foods Market (WFM) has been working on several initiatives to improve its value perception, rebuild traffic, and improve its long-term profitability. In the current article, we’ll discuss the progress of some of these initiatives.
365 store ready to be launched
Whole Foods Market (WFM) is all set to launch its first 365 store in Los Angeles on May 25, 2016. This new smaller store concept will house private label products that will be cheaper than those offered in traditional Whole Foods stores.
While talking about the launch of its 365 stores, Walter Robb, co-CEO of Whole Foods, said, “We are very excited to be just three weeks away from opening our first 365 by Whole Foods Market store on May 25 in Silver Lake, California. Created to complement our Whole Foods Market stores, our new 365 format will offer our same industry-leading standards and dedication to food transparency in a streamlined format designed around affordability and convenience and supported by enhanced digital experiences.”
Robb added, “We believe there is customer demand for both formats, and as a second growth vehicle, 365 allows us to attack the value-quality proposition in a new way while maintaining the integrity the Whole Foods Market brand represents in the marketplace. Our Silver Lake opening will be quickly followed by openings in Lake Oswego, Oregon, and Bellevue, Washington. We are excited to learn from these first three stores and evolve from there.”
The 365 store concept is Whole Foods’ initiative directed toward managing competition from value-based organic retailers Trader Joes and Sprouts Farmers Market (SFM) and mainstream food retailers Kroger (KR) and Walmart (WMT), which are already making big strides in the organic segment.
An update on Whole Foods’ tie-up with Instacart
WFM partnered with Instacart in 2014 to offer a grocery home delivery service and in-store pickups. As per the company’s management, Whole Foods and Instacart collectively manage the largest fresh grocery home delivery service in the United States.
Launch of new point-of-sale system
WFM has completed the pilot phase of its new point-of-sale (or POS) system. It’s aiming to complete the system rollout in all its US stores before the end of the current calendar year. The launch of the one-POS system will provide benefits such as operational efficiencies and consolidated item data to support personalized offers, category management, and supplier collaboration.
Investors can gain exposure to Whole Foods by investing in the Market Vectors Retail ETF (RTH). WFM makes up ~1.5% of RTH. The SPDR S&P Retail ETF (XRT) also holds ~1% exposure to WFM.
In the next part, we’ll learn what Whole Foods Market’s management has to say about the company’s performance in fiscal 2016.
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