Whole Foods Market has announced it will be cutting 1,500 jobs over the next eight weeks. The job cuts are an effort to cut costs as company earnings were down for the third quarter. Its stock also dropped more than 10% during the same time period. The decline in earnings can be partially attributed to competition from mainstream grocery stores that have expanded product selection to include more organic and health conscious items similar to those offered by Whole Foods stores.
One area that has become problematic for Whole Foods is price. The store has a reputation for being expensive, although its products are associated with higher quality. Other more mainstream stores, such as Jewel and Super Target, have started offering similar products as Whole Foods but at lower prices. In order to compete, the company is now looking at ways to cut costs and pass those savings on to customers through lower prices.
As far as the employees who stand to be out of employment following the upcoming job cuts, Whole Foods has indicated that it expects many of those individuals to apply for positions at other company locations. There are presently 431 Whole Foods stores throughout the U.S., Canada, and the U.K. The company has approximately 91,000 employees. Cutting 1,500 positions represents about 1.6 percent of that total employee population.
A potential employment option for Whole Foods employees whose jobs are ultimately cut is a new grocery chain called 365 by Whole Foods Market. The company plans to open the first of these stores beginning in the second half of 2016 and continuing through 2017. The new 365 stores are described by 365 president Jeff Turnas as being more tech-focused and “with a fresh format and a unique product assortment.”
The first 365 by Whole Foods Market will open in Los Angeles’s Silver Lake area sometime in 2016. The store will open in an existing Whole Foods Market grocery store that is being converted to the new 365 model. Use of an existing Whole Foods location will make it possible for the new store to open more quickly. Prices are expected to be less expensive at the new 365 locations in comparison to existing Whole Foods stores. The company is hopeful that the new store format and lower prices will attract a new demographic of customers and boost company earnings.