Whole Foods eyes vacant Sears stores after ditching millennial-bait ‘discount’ format

Amazon-owned US organic food and drink specialist Whole Foods Market is reported to be eyeing up vacant Sears and Kmart stores following the collapse of the famous retailer, as it ditches its value proposition aimed at millennials.

The retailer has recently done a U-turn on the its proposed ‘value’ proposition, Whole Foods 365 – a smaller store format offering a more limited number of groceries that targets urban and millennial shoppers – as co-founder and CEO John Mackey told employee in an internal email seen by Yahoo Finance that the concept wasn’t needed anymore.

It follows price-cutting exercise by new parent company Amazon across stores, meaning there isn’t a big enough price difference between regular Whole Food stores and the 365 concept to justify a separate proposition, he said.

So far Whole Foods has opened 12 stores of the planned 365, but Mackey said “learning and innovations” from the project would be incorporated into the wider business.

The retailer is still planning on upscaling the Whole Foods operation across the US however to bring more customers within range of Amazon’s two-hour delivery service, the Wall Street Journal reported over New Year, but according to Yahoo Finance, it is now looking at vacant Sears department stores and those of its subsidiary Kmart which offer a larger footprint than the more convenience-orientated Whole Foods 365 format.

Since 2016, Sears has closed around 123 stores and 205 Kmarts.

Whole Foods currently has around 470 stores, concentrating primarily on affluent neighbourhoods and cities on the East and West coast, but the national footprint and broad demographic of Sears’ department stores would help the retailer “scale up fast at a relatively lower cost”, Yahoo Finance said.

E-commerce giant Amazon announced it was buying around 450 the Whole Food stores across the US – more than half of which sell wine and beer – in a deal worth $13.7 billion (£10.7 billion) in June 2017, which analysts called a ‘wake-up” for retailers across the US and UK. It has since integrated Amazon Prime into the Whole Foods point-of-sale in order to offer its Prime customers special deals in store.