Whole Foods: New concept to take name of '365' house brand

NEW YORK -- Whole Foods says it will name its new chain of smaller stores with lower prices after its "365 Everyday Value" house brand.

Co-CEO Walter Robb said the chain will be named "365 by Whole Foods Market," a nod to the brand already sold by the grocery chain.

He said while 365 products will anchor the stores, the chain will have other items, including national brands.

Since announcing plans for the chain in May, recent trademark filings by Whole Foods Markets Inc. had prompted a guessing game the stores might bear names like Clever Egg, DailyShop, Greenlife, Small Batch or Swiftgoods.

"Those were all decoys," Robb said in an interview, before adding his claim could be a decoy to divert people about other plans.

The new chain, which is slated to begin opening next year, comes as Whole Foods seeks to differentiate itself amid intensifying competition. The company, which has more than 400 Whole Foods stores, has seen its sales growth slow as organic and natural products have become more widely available at mainstream supermarket chains and big-box retailers.

The new chain also may be inspired by the success of companies such as Trader Joe's and Sprouts, which also focus on value and store-brand products, said Jon Springer, retail editor for the trade publication Supermarket News.

"They've identified millennial shoppers, younger shoppers who are very particular about what they eat, but also tough about what they can spend on food," he said.

Executives in the supermarket and retail industry also are trying to adapt to the changing ways people are shopping. Wal-Mart Stores Inc., for instance, has been opening "Neighborhood Market" stores that are smaller than its supercenters, aimed at shoppers who want to get in and out quickly.

A similar philosophy seems to be behind the plan by Whole Foods. In its initial announcement, Whole Foods had said that the new chain would be "geared toward millennials." But Robb said while 365 is inspired by younger generations, it's intended to appeal to anyone who wants a quick, convenient way to shop.

Jeff Turnas, a Whole Foods veteran who was named president of the 365 chain, said he envisions people stopping in at 365 stores during the week when they want to get in and out of stores, with the regular Whole Foods stores being destinations for bigger shopping trips.

Turnas, who previously headed the U.K. business for Whole Foods, also noted a small Whole Foods location in London has an open-kitchen feel in its prepared food section. Turnas said something similar might pop up in the 365 stores as well.

Whole Foods says it plans to open between five and 10 of the 365 stores around the country next year, and it sees potential for the chain eventually to have as big a footprint as its namesake chain. The company, based in Austin, Texas, has provided few other concrete details about its plans for the chain.

In an earnings conference call in May, co-CEO John Mackey had described it as a "streamlined, hip, cool, technology-oriented store, unlike any store anybody has ever seen before."

When asked this week what 365 stores will look like, Robb remained similarly vague. He asked that people close their eyes and "stay with me on the words and flow" of his description. He then asked people to envision a place "that's fresh, that's clean" with a smaller, more neighborhood feel, a "streamlined" selection and "technology woven in," although he declined to say what type of technology that might entail.

But despite the bigger focus on value, Robb stressed the products in the 365 stores will have the same quality standards as "the mothership."

"It's not going to be a dumbed-down thing," he said.