Amazon-Owned Whole Foods Set To Scrap ‘365’ Division

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Whole Foods plans to scrap its 365 By Whole Foods store format, less than two years after launching the concept, which offered lower prices and a more local flavor than the company’s traditional WFM units.

The news first broke on Yahoo Finance, which reported on an email to company associates from the retailer’s co-founder and CEO John Mackey. In the email, Mackey said, “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. As the company continues to focus on lowering prices over time, we believe the price gap will further diminish.”

The news did not come as a surprise to analysts since the chain had lowered some of its prices since being acquired by Amazon in June 2017, leading to less differentiation between the 365 and traditional WFM formats.

Soon after acquiring the Austin, TX based retailer, Amazon also began offering discounts to Amazon Prime members and selling Amazon devices in Whole Foods stores. Additionally, Amazon began offering free grocery delivery for Prime members at select locations last year and gave customers the option to pick up their online orders at nearby Whole Foods locations. That program has been expanded and will eventually cover all markets where Whole Foods operates. Also being broadened is the company’s “Prime Now” program, its two-hour delivery service for select items, which is currently offered in about 60 cities throughout the U.S.

Perhaps also related to the decision to end the 365 format is the company’s current focus on its other bricks-and-mortar retail division, Amazon Go. Both 365 and Amazon Go are smaller sized prototypes offering fewer items than a traditional supermarket. What sets Amazon Go apart is its extremely small footprint (about 1,500 square feet), its cashier-less design that gives customers a quicker, more streamlined shopping experience that focuses on quick purchases of often-needed items. It currently has opened 10 “Go” units in major cities, locating those stores in busy downtown urban sites.