The stores will differ from regular Whole Foods stores in the following ways:
- Lower prices (as is the store's goal),
- Fewer employees per store,
- More frozen and pre-packaged food, and
- Increased product concentration of its in-house label, '365'.
The retailer's American stores earn a gross margin of between 34% and 36%, compared to Walmart and Target's 24%-29%. Lowering prices and quality could still positively affect Whole Foods' bottom line.
Whole Foods may have to be concerned about their brand perception, however, if it chooses to roll-out its lower-cost stores globally. The store's current high-quality, higher-priced status could be compromised if the concept isn't handled properly by company management.
Whole Foods currently has 9 Canadian stores and expects to open 40 more locations in the coming years, according to the Financial Post. The company intends on eventually having Canadian sales of about $1 billion. It has about 350 American stores with about $12 billion in sales. It has said it wants as many as 1,000 locations eventually, according to its CEO John Mackey.
[Partial article source]
[Whole Foods website]