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Whole Foods Is Launching a Rewards Program in 2017

The grocer continues to battle its "Whole Paycheck" reputation

Whole Foods

A Whole Foods rewards program is on the horizon, as are more in-store meal kits (and possibly even meal kits delivered the traditional way). This according to chief executive officer John Mackey, who spoke to investors on an earnings call Wednesday afternoon.

According to Mackey, the organic grocer will soon roll out its optimized rewards program at all U.S. stores. The program has been tested in both Philadelphia and, more recently, Dallas-Fort Worth and offers a number of rewards. According to a press release, users get 10 percent off their first purchase, a one-time offer of 15 percent off any department, and select free products throughout the year. The more customers shop at Whole Foods stores, the more rewards are unlocked.

Though executives wouldn’t share exact dates, they noted the rewards program will become available at all stores in 2017. Already, there are nearly 50,000 people enrolled in the program in the Dallas metro area.

In addition to the rewards program, the chain will begin offering more "ready-made meal solutions." According to Mackey, those meals will be available both in store and "delivered to your door," though he didn’t expand on what that might mean. It certainly sounds like a Whole Foods-branded meal kit, further pushing into an industry in which the company is already working to make its mark.

Noting increased competition from companies such as Blue Apron, Amazon, and Plated, Mackey said "the great thing about Whole Foods is we’re producing a lot of cash [and] have very good long-term positions as this marketplace plays itself out. ... There will be some exits from the market, some consolidation ... but we’ve got a competitive runway ahead of us and we’re going to continue to up our game."

Just last week, a Whole Foods in Dedham, Mass., began offering Purple Carrot meal kits in-store. The partnership allows customers to buy boxes of pre-portioned ingredients, a recipe, and step-by-step instructions, rather than having to subscribe to the meal kit service. Subscriptions have proven to be the biggest hurdle for the meal kit industry, with recent research showing that some 90 percent of subscribers to Blue Apron drop the service within six months.

The company will also continue to expand its partnership with Instacart, which allows users to order groceries for delivery to their home. The forthcoming rewards program, said executives, will allow that program to grow further. "We have the opportunity to make that a much richer experience," said Mackey, adding that the company wants its online shopping experience to eventually be "as rich as shopping in-store."

Earlier in the day, Whole Foods announced a change to its leadership, with co-CEO Walter Robb stepping down. Moving forward, Mackey will serve as the company’s sole chief executive officer.

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