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Whole Foods' Cheaper Stores Will be Smaller, Target Food Deserts

The first stores should open next year.

Justin Sullivan/Getty Images

Whole Foods' new line of affordable grocery stores will aim to serve more than cheap millennials. The 365 by Whole Foods Market brand will actually target food deserts, too, executive vice president Jim Sud announced during a discussion at the International Council of Shopping Centers Florida Conference.

"There's a perception that Whole Foods only caters to wealthy clientele, but we see customers who are very high end to those who come in and spend what looks to be their last dime," Sud said. "Food deserts — where there's not a supermarket within two miles — obesity rates [are higher]. We want to be able to provide those residents access to fresh, healthy foods."

The first five of the new stores are on track to open next year, though locations haven't been announced, and that number should double in 2017. They'll be smaller than regular Whole Foods stores — 25,000 to 35,000 square feet, as opposed to 45,000 to 50,000 — and inventory will be cut back to "focus on value," according to Sud. Whole Foods has struggled with sales in recent years, and the company hopes the new line will help it to get back on track — and shed its infamous "Whole Paycheck" nickname.