Fintech & Ecommerce

Amazon’s Whole Foods Plans to Open New Small-Format Stores

An Amazon-owned grocery company will open new small-format stores that are focused on serving urban consumers making quick trips.

Amazon’s Whole Foods Plans to Open New Small-Format Stores

The new stores, called Whole Foods Market Daily Shop, will be located in commercial premises ranging from 7,000 to 14,000 square feet. These establishments are a fraction part of the Whole Foods chain. The average store area of this commercial structure is about 40,000 square feet.

The Daily Shop will offer consumers a wider range of products, which includes fresh produce and frozen foods. Also, these stores will sell products under the Whole Foods 365 brand. There will be no buffets bars or meat counters.

Christina Minardi, executive vice president of growth and development at Whole Foods Market and Amazon, says that the introduction of home delivery has changed the mentality of shoppers. Against the background of new solutions in the consumer environment, the need for high-speed service processes has formed. It is worth noting that Amazon’s ownership structure includes the best American delivery service. Whole Foods operates more than 530 stores and is the centerpiece of the e-commerce giant’s grocery business.

In recent years, Amazon has made efforts to stop the negative process of slowing down traffic that formed during the coronavirus pandemic, when, against the background of various restrictions on human activity, forced decisions were made to close popular food bars and samples – features that were brought back after a while.

The e-commerce giant is looking to increase spending on groceries. The company positively estimates the current dynamic of Whole Foods’ business, which is on a growth trajectory. Also, a chain of stores under the Amazon Fresh brand is currently being developed. In this case, consumers are offered products at more affordable prices.

Whole Foods, based in Austin, plans to open the first Daily Shop on the Upper East Side of Manhattan by the fall of 2024. The company has signed five lease agreements in New York to implement the relevant business concept and intends to explore expansion opportunities in other US cities. Christina Minardi says that the stores of this brand will have cashiers, self-checkout stations, and Amazon One, a payment service. All products will comply with Whole Foods’ quality standards, which prohibit the use of ingredients such as high-fructose corn syrup.

In 2016, Whole Foods opened small stores called 365 from Whole Foods Market. These outlets specialized in selling cheaper products under their own brand to attract a large number of customers. About three years later, it was decided to abandon the original business concept. The stores were larger than planned for Daily Shop locations, by about 25,000 square feet, and gradually transformed into full-service locations with food bars.

Christina Minardi says that since 2010 she has been thinking about a smaller convenience store-type format. Her team has been developing an appropriate business concept for the past two years. According to her, it is difficult to find larger premises in urban markets, and small stores require less time to design and open.

In recent years, Whole Foods has declared its desire to expand its network of locations and its intention to test new formats. Jason Buechel, the company’s chief executive officer since 2022, announced plans to upgrade stores by adding more samples, events, and other experiences that went on hold during the pandemic. The range of prepared food offerings is also expanding.

In some locations, package bagging areas at self-checkout stations are expanding. This solution is aimed at facilitating the procedure for making large purchases. Parking lots are also being upgraded to better handle online orders. Last year, the company consolidated its operating regions. It was also decided to lay off hundreds of employees as part of the restructuring procedure.

American retailers are currently experimenting with their business strategies in the real estate sector in response to changing consumer behavior. For example, Target is adding large-sized stores, and Sprouts Farmers Market is doubling down the number of small locations. Best Buy is exploring new formats. Walmart plans to build or renovate about 800 retail locations in the coming years.

Whole Foods currently has the status of a kind of popularizer of organic and natural products in the United States. This company became part of Amazon’s ownership structure in 2017 after a decline in sales and pressure from activists, as traditional grocers began selling the mentioned products at lower prices. Whole Foods sees opportunities in food retailing. In 2022, the company hired Tony Hoggett, a former Tesco executive, to lead grocery efforts. The e-commerce giant continues to be focused on the mentioned stores, making a gradual move away from apparel and other types of retail.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.