Whole Foods Market is to discontinue its smaller footprint ‘365’ store model, according to US media reports. 

The Amazon-owned natural foods giant says that the there is now insufficient differentiation between conventional Whole Foods stores and its 365 brand – existing 365 outlets are expected to be folded into the main retail business and rebadged as Whole Foods Market stores.

The development follows an internal announcement in January that expansion plans for the 365 store concept had been shelved. 

The first Whole Foods 365 store opened in May 2016 in Silver Lake, California. The concept was billed as having lower prices and a smaller format than traditional Whole Foods stores. The smaller format 365 outlets – of which there are currently 12 –  carry about 7,000 SKUs, less than half of the 20,000-plus SKUs at full-size Whole Foods stores, and don’t include full-service departments such as deli or bakery.

Whole Foods believed the new format could capture a new, younger shopper  – retail commentators quickly branded the new stores ‘millennial-bait’.  

Prior to Amazon’s acquisition of Whole Foods in summer 2017 there had been plans for thousands of 365 store openings across America. But in an employee memo written in January 2019, Whole Foods founder John Mackey noted “as we have been consistently lowering prices in our core Whole Foods Market stores over the past year, the price distinction between the two brands has become less relevant” and “…as a result, we have decided that it’s in the best long-term interest of the company to concentrate our efforts on growing the core Whole Foods Market brand moving forward.”

Some retail commentators have suggested that part of the reason for the change of plan has been “disappointing” sales at the 365 stores. Others have suggested that the 365 model no longer has a place in Amazon’s bricks and mortar retail strategy, which is now focused on making Whole Foods a store “for the general population” and developing its cashier-less Amazon Go outlets.