Even Whole Foods Realized It’s Too Expensive for Millennials
Whole Foods Market, the high-end grocery chain specializing in organic products, will be opening new stores geared toward cash-strapped millennials.
The company announced the new store concept Wednesday along with their 2015 second-quarter earnings release.
Company executives revealed little, only noting that the stores will include “innovative technology and a curated selection” of goods. Whole Foods expects to open the stores next year and will reveal more details over the summer, the company said in a press release.
Millennials are having trouble affording their groceries and love getting deals on their purchases, so a cheaper version of Whole Foods is sure to be welcomed.
But the grocery chain still faces stiff competition from other supermarket chains and online grocery retailers that sell fresh food at good prices.
Whole Foods has a reputation for selling their products with high price tags. People even jokingly call the chain “Whole Paycheck Foods.”
In March, Consumer Reports magazine compared the cost of conventional goods versus organic goods at eight different supermarkets and online grocery shopping sites, including Whole Foods.
The survey found that while Whole Foods generally priced their organic goods at similar or cheaper rates compared to other grocers, the company often sold their conventional goods for significantly more than the others.
This could be Whole Foods’ strategy for enticing people to buy organics at their stores: minimizing the price differential between conventional goods and organics to make the premium products more attractive.
For example, one pound of nonorganic whole chicken at Whole Foods cost $2.49, which was the most expensive of all eight retailers. On the other hand, a pound of organic whole chicken was $3.49, which landed Whole Foods on the cheaper end of the organic price spectrum.
Of course, prices varied depending on the product, but there is evidence to show Whole Foods is beginning to lose customers to online grocery retailers.
In a recent Nielsen global survey, 30 percent of the millennial respondents said they ordered groceries online. Whole Foods may benefit from experimenting with the new store concept aimed at price-sensitive millennials.