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Health-Focused Retailers and the American Obesity Epidemic

Last fall, Whole Foods announced plans to role out 365 by Whole Foods, a new store concept that is millennial-geared and a lower-cost version of its current grocery store chain in the U.S. (Check out my previous post on that, WFM Seeks to Capture Millennials with ‘365’ Stores.) In May, the first 365 opened in the Silver Lake neighborhood of Los Angeles.

On opening day, the place was swarmed! And the design and décor was on point to capture the target audience, Millennials (who else?). Tim Walker of Independent captured this in his article stating, “The store’s interior is a cool, cavernous hangar with low-slung shelves and wall-mounted iPads, where shoppers can order quinoa bowls and bánh mi hot-dogs to be picked up later from an order window, or scan bottles of wine to see Amazon-style, crowd-sourced tasting notes. There’s an in-store “Juicero”, a kind of Nespresso for fruit and veg, which turns pouches of fresh produce into 8oz of cold-pressed juice and has been endorsed by Gwyneth Paltrow.”

While the store will only carry about 1/3 of what a normal Whole Foods stocks, produce and products are significantly more reasonably priced; a strategy to compete with chains like Trader Joe’s which has seen success targeting the tech-savvy, budget– and health–conscious Millennial shopper.

It will be interesting to see how 365 is embraced as it continues to roll out stores with plans to expand into Santa Monica, Houston and Seattle in 2016. This isn’t the first time we’ve seen large retailers take the smaller square foot approach. (Let’s not forget about the failed Walmart Express pilot.)

The roll out of more health-focused retailers couldn’t come at a better time with the recent release of two reports from the Centers for Disease Control and Prevention siting America’s Obesity Epidemic Hits a New High. The reports show that efforts to encourage Americans to lose weight — at least to stop putting on more weight — are having little effect. With the obesity epidemic in the U.S. now three decades old, what role do retailers like 365 play in the big picture? According to the journal’s editors, Dr. Jody Zylke and Dr. Howard Bauchner, a significant one: “The food and restaurant industries may be the sector of society with the greatest potential to affect the obesity epidemic in a reasonable time frame.”

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