Whole Foods Market to Open Smaller Format Stores

Whole Foods Market, the Austin-based grocery store chain owned by Amazon.com, announced Monday it was introducing a new, smaller, "quick-shop" store format "designed to provide customers in urban neighborhoods a quick, convenient shopping experience with easier access to fresh, high-quality offerings," according to a company press release.

The new format, called Whole Foods Market Daily Shop, will see its first location on the Upper East Side in Manhattan later this year. The company plans to open more locations in New York and other unannounced locations after that. The stores will range from 7,000-14,000 square feet (compared to Whole Foods' existing stores' average of 40,000 square feet) and offer grab-and-go meals, snacks, weekly essentials, seasonal produce, meat, seafood, breads, alcohol, supplements, and local specialties. The first Manhattan location will also offer Juice & Java, a venue for coffee, tea, fresh pressed juices, smoothies, sandwiches, soups and desserts.

Total Retail's Take: At this point it's unclear how many new-format stores Whole Foods will add to its already substantial brick-and-mortar footprint (530 locations).

While it has conquered the world of e-commerce, Amazon has had a tumultuous run in the grocery industry, and the brick-and-mortar sector as a whole: It opened a series of small Amazon Go convenience stores starting in 2018, but has since begun closing them; it opened and then closed its bookstores within seven years; and shuttered its Amazon Style clothing stores within two years of opening them.

Prior to being bought by Amazon in 2017, Whole Foods Market had attempted a similar smaller-format concept, 365 stores, which were marketed as price-conscious alternatives to Whole Foods stores. However, the format failed to gain traction with consumers, and Amazon closed the 12 locations in 2019, turning them into Whole Foods stores.

It's clear Amazon is still prioritizing grocery as a growth category for the retailer. In November, the company announced it was expanding Fresh grocery deliveries to non-Prime subscribers, for example. These new format Whole Foods' locations are the latest investment Amazon is making to grow its market share in the grocery industry.