Whole Foods Market scraps 365 plan

Austin, Texas-based Whole Foods Market once had an ambitious plan to broaden customer appeal with its 365 stores. But now it’s saying goodbye to the cheaper and smaller store format.

Whole Foods CEO John Mackey told employees the Amazon-owned grocery chain will not open new Whole Foods 365 stores anymore, according to an internal email reviewed by Yahoo Finance. The existing 12 stores, the newest of which just opened in Atlanta in December, will remain in business.

Launched in 2016, 365 stores heavily feature Whole Foods private brand products, including 365 Everyday Value products, to lure budget shoppers who have avoided the premium stores once referred to as "Whole Paycheck." Following Amazon’s acquisition, those brands have become increasingly available in regular Whole Foods stores, Amazon.com and even Amazon Go stores, according to Yahoo news.

According to Yahoo news, Mackey said the main reason behind the strategy shift is Whole Foods’ prices. “As we have been consistently lowering prices in our core Whole Foods Market stores over the past year, the price distinction between the two brands has become less relevant,” Mackey wrote. “As the company continues to focus on lowering prices over time, we believe that the price gap will further diminish.”

Seattle-based Amazon has been rolling out discounts and weekly deals for Prime members who shop at Whole Foods stores. But in August, 40 percent of more than 2,000 Whole Food shoppers surveyed by Yahoo Finance said they believe the prices of products in stores aren’t really lower.

To read the Yahoo news article, click here.