Whole Foods Market Inc., which announced plans on Wednesday for a lower-priced chain aimed at millennials, filed a flurry of trademark applications in the past week, potentially giving a clue about the new chain’s name.
The company, which didn’t say what the stores will be called, filed applications for retail grocery services under the names 365, Dailyshop, Clever Egg, Small Batch, Swiftgoods and Greenlife. 365 Everyday Value is already the name of a Whole Foods private-label brand.
Whole Foods is creating the new supermarket chain after losing shoppers to retailers such as Kroger Co. and Wal-Mart Stores Inc., which are increasing their organic and locally produced offerings. The mounting competition took a toll on Whole Foods’ second-quarter sales, which trailed analysts’ estimates and sent the shares plunging. The new millennial-focused concept is aimed at bringing some budget-minded customers back to the company.
“We believe the growth potential for this new and complementary brand to be as great as it is for our highly successful Whole Foods Market brand,” Co-Chief Executive Officer Walter Robb said.
The new stores will have their own brand and offer products at value prices, the Austin, Texas-based company said. They also will be smaller than traditional Whole Foods stores, won’t require as much capital investment and will be “tech savvy,” Co-CEO John Mackey said during a conference call. While there may be some overlap with Whole Foods, the new stores will be “very complementary,” he said.
Still, there’s some concern that the new concept will steal customers from traditional Whole Foods stores and that their profit margins will be lower, said Brian Yarbrough, an analyst at Edward Jones & Co. in St. Louis.
“I do think the value concept makes sense,” he said. “But does it cannibalize Whole Foods sales?”
Whole Foods said it’s building a team to focus on the new stores and negotiate leases. The brand will have a “modern, streamlined design” and a more standardized product assortment, the company said. The retailer plans to share more details on the initiative before Labor Day, which comes on Sept. 7 this year.
The grocer already has been trying to attract shoppers with convenience. Last year, Whole Foods teamed up with Instacart to offer delivery in 15 cities, including Boston, Los Angeles and Seattle. It’s helping drive sales in those markets, and the company plans to expand the service to new areas, Robb said in February.