AUSTIN, TX - Is Whole Foods plotting to ditch its “Whole Paycheck” reputation for good? Once upon a time, to see one of the specialty food grocers in a low-income neighborhood was unheard of, but now it’s actually part of its strategy.
With a new location popping up in Chicago’s low-income Englewood neighborhood, Whole Foods is doubling down on a plan it announced six years ago to expand to lower income areas, The Wall Street Journal reports. Since 2013, the retailer has opened locations in both Detroit and New Orleans, and has plans to open another next year in Newark, New Jersey.
At its low-income stores, Whole Foods has made it a point to sell its basic grocery items, like eggs, at lower prices. It’s also focused its products towards beer, wine, and ethnic beauty products, according to Wall Street Journal.
But will the risk payoff for the company financially? As reported by Fortune, the Englewood location is a particularly daring move due to its surrounding areas. With just a community college and the future site of a Starbucks, there’s really not much to draw in a crowd. And perhaps even more pointedly, Englewood’s median income is $20,500, around just a fourth of the typical income around a Whole Foods location. But despite the odds, Whole Foods’ execs are remaining positive about its financial prowess in the region.
“We aren’t doing a nonprofit here. This is a for-profit business,” Co-CEO Walter Robb told the Journal. “The model is slightly different, but to be clear, we’re operating to run a successful business here in Englewood.” Whole Foods’ stock has dipped 15 percent so far this year.
Chicago seems more than ready to welcome the Whole Foods into its low-income neighborhoods, and is willing to pay the price. Fortune reports that the land was sold to Whole Foods for only one dollar, with the retailer receiving $10.3 million in tax subsidies. In total, the development cost about $20 million.
Could this new foray into low-income neighborhoods be the image change Whole Foods needs to succeed? We'll find out in the financial reports to come.
