Whole Foods, now owned by Amazon, shuttered one of its 365 stores in Bellevue, WA, after about a year of operation, 425 Business reports.
The closure was planned before the August acquisition, although employees were told about it just a few days ago, according to the report. The 50 or so employees may be able to work in area Whole Foods stores after the closure.
Whole Foods spokesperson Robin Kelly told 425 Business that the 365 concept will continue. Retail Dive's requests for more information and comment from Whole Foods and Amazon weren’t immediately returned.
Whole Foods’ 365 stores are an answer to the likes of Trader Joe’s, Aldi and Lidl — German grocery chains that provide private-label merchandise to keep prices low. It’s an approach that has resonated with many shoppers, in large part because the goods, while not presented in huge quantities or varieties, are as much as 30% cheaper than comparable brand-name items.
The propensity of younger shoppers to search out such goods has provided fertile ground for retailers with high-quality private label brands. Millennials in particular, who came of age during the Great Recession and are less brand-loyal than their parents and grandparents, are some of the most interested consumers. The number of heads of households shopping at dollar stores under 35 years-old, earning more than $100,000 a year, increased 7.1% between 2012 and 2015, compared to 3.6% at all retail stores, according to Nielsen research.
Some 29% of millennial dollar store consumers earn over $100,000 annually and accounted for about 25% of sales at those stores, much of it to no-name brands of common household items, according to market research firm NPD's Checkout Tracking. Store brands also represent an avenue for customer loyalty, but last year analysts warned that 365 stores could compete too closely with Whole Foods itself.
Credit Suisse analysts said it was clear that 365 stores would steer shoppers away from Whole Foods stores, while investment boutique Oppenheimer noted that the 365 stores are too close to the flagship stores.