Reports that Whole Foods is halting development of new stores in its smaller-format and more affordable line — 365 by Whole Foods Market — have cast new uncertainty over the company’s plans for a Toledo location.
Consumers in the Toledo area have been anxiously awaiting the opening of a 365 store here. A 35,000-square-foot grocery building at 3379 Secor Rd. has been ready to open as a 365 since early 2017, and the Whole Foods 365 website has promised a future store here but has not said when.
Tenants in the shopping center were told there would be a Whole Foods store in 2017, then 2018, and finally 2019. In the opening days of the new year, Whole Foods posted multiple job openings — for supervisors, floor workers, meat cutters, and other positions — at the Secor Road location.
But an internal Whole Foods email quoted by news outlets Monday, including trade publication Progressive Grocer, cast all that into doubt. The email said that during the past year, Whole Foods’ pricing has changed to the point that the 365 format is no longer distinct enough to continue its development.
“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,” John Mackey, Whole Foods’ chief executive, said in the email. “As the company continues to focus on lowering prices over time, we believe that the price gap will further diminish.”
A Whole Foods media representative did not respond Monday to an inquiry about the situation, and a public-relations company representing the developer involved with the Toledo site said it had no information.
Whole Foods, based in Austin, Texas, is a subsidiary of Amazon.com, Inc. Industry analysts told The Blade in October that Amazon does not view grocery stores the way Kroger, Walmart, or Meijer does. Instead, Amazon sees selling groceries as a way to sell its Amazon Prime subscription service.
To that end, it has used Whole Foods as a perk. When Amazon acquired Whole Foods in August, 2017, its first move was to sell its technology, like Amazon Echo, in the stores. Then the company began giving discounts at Whole Foods to customers with a Prime account, and recently it began free Whole Foods home delivery in some cities to Prime members.
Industry experts previously said they had doubts that Amazon was committed to growing the number of Whole Foods 365 stores. The company said in late 2018 that by 2021 it wants 3,000 AmazonGo stores — 2,000-square-foot convenience markets keyed to apps and smartphones, that contained freshly prepared foods and a short list of groceries.
“In my opinion, [365 stores are] a failure that never lived up to the hype and I see Amazon going with the AmazonGo concept and bailing on 365,” Phil Lempert, a California-based analyst who is known under the name “Supermarket Guru,” said in October.
First Published January 14, 2019, 11:49 p.m.
