Possible Impact of Reported Whole Foods Market Expansion

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Whole Foods Market®

As WholeFoods Magazine previously reported, Amazon is planning to build and expand Whole Foods stores across the U.S. in the hopes of putting more customers within range of its two-hour delivery service, Prime Now, according to the Wall Street Journal (WSJ).

WSJ reported that this would bring Whole Foods to more suburbs, where it is quickly adding customers. The newspaper added that Whole Foods employees have visited potential retail spaces in Idaho, southern Utah and Wyoming, where Whole Foods currently has no stores, and that the spaces visited were around 45,000 square feet.

“Amazon’s intention to expand Whole Foods Market to lower-population-density trade areas makes sense given Amazon’s priorities, which are different than were the legacy Whole Foods’ priorities,” Jay Jacobowitz, president and founder of Retail Insights, tells WholeFoods Magazine. “While the original Whole Foods Markets catered to natural, organic and foodie customers, Amazon’s goal is to make delivering food quickly to a larger percentage of U.S. households feasible. The reportedly larger, 45,000-square-foot model, compared to the 30,000-square-foot ‘365’ store model, will likely accommodate pickup and delivery space separate from the retail areas.”

Forbes estimated that Amazon could build upwards of 2,000 Whole Foods Markets, but that the product assortment would have to drastically change, growing to include cheaper, brand-name products, such as Lay’s and Coke, in order to draw in the volume of customers necessary to maintain new stores.

Jacobowitz contends that this is a possibility. “Watch the shift in the product mix. No longer will Whole Foods closely adhere to its historic high-quality ingredient standard, but will expand to include conventional-quality, high-velocity grocery items.” As Jacobowitz sees it, “you can call it Whole Foods, but some shoppers won’t think so.”

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