July 5, 2016 § Leave a comment
Maybe I just don’t like 365’s parent company, Whole Foods Markets.
You’ve heard the common complaint, that the stores should be called “Whole Paycheck” because of the high prices.
But I’ve got a few more grievances:
- John Mackey, a Whole Foods founder and current co-CEO, is an anti-union, libertarian jerk who felt so strongly about Obamacare that he wrote a Wall Street Journal op-ed opposing it.
- Mackey expanded Whole Foods by scooping up regional chains, e.g. Fresh Fields in No. Virginia and Mrs. Gooch’s in SoCal, to create a near monopoly on what we used to call health food stores. Independent stores, with clerks who knew you and their products, got pushed out of business.
- Whole Foods masquerades as a health food store but is actually an up-scale big-box merchandizer selling gourmet products to a monied constituency.
And now along comes 365, designed to cut costs by requiring only 100 employees to operate, as opposed to the typical Whole Foods Market that employs 250 to 500 workers. The preponderance of prepackaged produce and a DIY regimen for what isn’t—customers must weigh and tag their own, a task done by check-out clerks at Whole Foods Markets—also cut labor costs.
The company says prices at 365 are cheaper than at Whole Foods, but that’s more appearance than reality. The store brand—365—dominates inventory; shoppers looking for high-priced specialty items won’t find them. A Los Angeles Times consumer review of five basics found 365’s priced about the same as Trader Joe’s.
Whole Foods is gambling on the success of its 365 stores. According to the L.A. Times, full-sized Whole Food Markets open a year or more have shown three straight quarters of declining revenue; this year’s sales are flat. Shares are trading at less than half their $65 high in the fall of 2013. The company has announced its intention to open five more 365 locations in SoCal.
The company is upfront about banking on Millennials to pull them out of their hole. The stores employ technology Millennials have grown up with: iPads to place orders with the store kitchen and a wine section where you find reviews by scanning labels with a smartphone.
And then there’s the not-too-subtle marketing. The company ran three full-page ads targeting Millennials in the Times’ “Saturday” section just before opening day. They border on being parodies of themselves: good-looking young people, not all of them white and some of them tattooed, with phrases such as “good choices,” “good times,” “good vibes,” and “good things” liberally sprinkled about.
Seriously, could they get any more effing annoying?