Whole Foods to Discontinue 365 Rollout: Report

Whole Foods Market CEO John Mackey has reportedly told employees that the chain will no longer open stores under the 365 banner, noting diminishing distinctions between its flagship banner and its smaller, price-focused sibling under new parent Amazon.

The 12 Whole Foods 365 stores will continue to operate, according to a report in Yahoo Finance, which obtained a memo from Mackey detailing the changes. The newest 365 stores opened in Marietta and Decatur, Ga., last month but they evidently will be the last to debut.

“As we have been consistently lowering prices in our core Whole Foods Market stores over the past year, the price distinction between the two brands has become less relevant,” Mackey wrote, according to the report. “As the company continues to focus on lowering prices over time, we believe that the price gap will further diminish.”

The first 365 store opened two years ago in Los Angeles but the concept was in development for some time before that. Whole Foods critics had long argued that a more cost-effective interpretation of its brand—while a sound move given trends in the industry—could undermine the parent brand, because its service and assortment offering could not support more competitive pricing.

That changed upon Amazon’s acquisition of Whole Foods in 2016 and the subsequent discounting supported by Amazon’s Prime loyalty program.

The Yahoo report said 365 employees would be absorbed into existing Whole Foods divisions and that the move was not related to development of Amazon’s Go concept.