In an attempt to fend off fierce competition in the organic and natural foods category, Whole Foods plans to test a new loyalty program as part of its first national marketing campaign.
What’s more, the company plans to expand home delivery.
“We believe there are real and substantive differences in the company and in the values and the foods that we sell,” Walter Robb, co-CEO of Whole Foods, said during a conference call with investors.
Robb added that Whole Foods will partner with third parties to offer home delivery in 12 to 15 major markets, with plans for a wider rollout over time. The new loyalty program will be tested in the coming weeks, with plans to roll it out widely in time for the holiday season next year.
Whole Foods competes with retailers such as Wal-Mart Stores Inc. and Kroger Co., both of which have significantly expanded their organic and natural food offerings.
Whole Foods expects sales at established locations to rise 4.1% to 4.4% for the year, down from its previous forecast of 5% to 5.5%.
For its third quarter ended July 6, 2014, Whole Foods saw its total sales rise 10%, to a record $3.4 billion. What’s more, same-store sales increased 3.9%.
Robb said that the company’s business model is producing industry-leading sales per square foot, healthy returns on invested capital and strong operating cash flow.
“We are seeing signs of stability in our sales trends and believe our strategic initiatives will help generate further momentum and produce increasing returns on invested capital over the long term,” he added.
Whole Foods currently has 388 stores totaling about 14.7 million square-feet and expects to cross the 500-store mark in 2017. Longer term, the company sees a demand for 1,200 Whole Foods Market stores in the United States.
The company recently signed 11 new leases, including two relocations. These leases include five new markets and are located in Montgomery, AL; Irvine, CA; Los Angeles, CA; Sacramento, CA; Bloomington, IN; Shrewsbury, MA; Cary, NC; Bedford, NH; Eugene, OR; Houston, TX; and Richardson, TX.