Whole Foods plans on opening a less expensive and millennial-friendly new chain of stores as it faces increasing competition. Shares of the company plunged after posting disappointing earnings.
The Millennial Generation includes people born from the early 1980s to the mid 1990s.
Whole Foods didn’t disclose a name for the new chain, but the company said more details will be shared before Labor Day.
The company wants to appeal to a broader audience and combat its “Whole Paycheck” nickname – because of its costly, organic cuisine.
“This new format will feature a modern, streamlined design, innovative technology and a curated selection,” co-CEO Walter Robb said. “It will offer convenient, transparent, and values-oriented experience geared toward millennial shoppers, while appealing to anyone looking for high quality, fresh food at great prices.”
The new stores are set to launch next year, according to co-CEO John Mackey.
“We think a streamlined, hip, cool, technology-oriented store unlike any store anybody has ever seen before that has lower capital, lower cost, perhaps little labor cost and lower prices is going to be very, very attractive to that particular generation,” said Mackey.
Mackey also said that he does not believe the new chain will cannibalize sales at existing Whole Foods stores.
The company reported total sales of $3.65 billion for its second fiscal quarter, falling short of what analysts expected, of $3.71 billion, according to FactSet.
Profit increased 11 percent to $158 million, or 44 cents per share – a penny higher than expected.