We’ve previously thought that millennials were more concerned about fresh, wholesome and organic food than the price-tag, but Whole Foods is learning that this largest living generation is just as price conscious as other demographics.
The multi-billion-dollar corporation is looking to show the marketplace that it isn’t just a store with high-quality foods with high prices. It’s accomplishing this by launching new low-cost stores that are marketed towards millennials, an age group the company initially thought was indifferent to price.
According to co-founder and co-CEO John Mackey, the stores will cater to younger shoppers that still want natural, organic foods, but with a different shopping experience, which means lower prices. Overall, the sister stores will be inexpensive to run, maintain lower prices and push ahead with a "hip, cool and tech-oriented" image.
Perhaps Whole Foods will shed the image of "Whole Paycheck," a moniker made by the general public alluding to how expensive the store can be.
"This marketplace continues to grow and explode, and I think we think by creating a second growth vehicle for our company, we can broaden the accessibility to fresh, healthy foods," co-CEO Walter Robb said on a call with news media (via USA Today). Mackey, meanwhile, noted that Whole Foods is "light years" ahead of the competition so it’ll take its competitors a while to catch up.
Many of the details remain unclear, such as how it will offer lower prices, what the name of the stores will be, where the stores will be located and when they will be opened. These unknown variables should be released in the coming months
Although the company has been successful because of fresh produce, bright displays and clean stores, it has been losing considerable traction due to greater competition at other grocery stores and budget-friendly millennial consumers. Indeed, Whole Foods is beginning to learn that much of what we thought we knew about millennials is actually false.
Millennials Care About Price, Too
We, and other news outlets, have reported, analyzed and dissected the research data that suggest millennials are apathetic about prices and just want something that is healthy, fresh and organic. However, since millennials are getting older and becoming independent - no longer are they using their parents’ credit cards - they are seeking out cost-friendly food items.
Millennials were one of the hardest hit groups of the economic collapse. The 18-to-34 group graduated college, and continue to exit post-secondary institutions, with a bleak labor market. The recession caused massive amounts of layoffs, while restricting millennials from entering the workforce. Today, when jobs are created, millennials are oftentimes attaining low-paying jobs that don’t require a college degree.
This means that millennials have to keep an eye on the pennies, and this is shown in their food-purchasing behaviors. In other words, they don’t have a lot of money to spend on expensive grocery items.
Another part of the equation is that millennials have an abundance of options. Whole Foods isn’t the only game in town that offers natural and organic foods and beverages. From stores like Wal-Mart to pharmacies like Rite Aid, millennial consumers are discovering organic trends everywhere.
Business experts posit that the latest strategy from Whole Foods is an attempt to capture the single millennials. These people aren’t getting married or having children anytime soon, which means they have modest budgets and could transform into long-term customers.
"My guess is that they’re trying to get them now, when they are single and don’t have a family, and then graduate them into mainstream Whole Foods stores later," Darren Seifer, food and beverage analyst at market research firm NPD group, told the Washington Post. "Which will be interesting, because we haven’t really seen it in the food and beverage retail industry."
This may be the future of Whole Foods: a store with 400 locations in the United States, Canada and Great Britain and $3.65 in annual stores, but unable to grow any further, unless this initiative is immensely successful.