cannibalization hurt in addition to competition
year. In addition to headwinds from a tougher comparison in a highly competitive environment, the negative impact from cannibalization increased for the third consecutive quarter.
Stepped up value offerings
We stepped up our value offerings to customers primarily through more and deeper promotions such as our customer appreciation, love fest and three-day sale in supplements, which were supported through social media, digital ads and select radio ads. Over the remainder of the year, we plan to continue our promotional strategy including more personalized offers and increase and broaden our price investments as well.
Coupons have been top request
Coupons have been the top request among users and now with a simple scan at the register preloaded digital coupons can automatically be applied to matching items in a shopper’s basket. We encourage everyone to download the app today and take advantage of deep discounts on everyday staples like milk, yogurt and granola, seasonal offers like $5 off the dozen Whole Trade Roses just in time for Valentine’s Day and more. This is a win for customers, a win for us as well as we will gain actionable customer data on a national scale.
13 365s set to open
Finally, with 13,365 by Whole Foods Market leases now signed, we are pleased to share the opening schedule for our first stores. We expect to open in Silver Lake, California in late May, Lake Oswego, Oregon in July and Bellevue, Washington in August. We invite you to check out 365 by wfm.com for a taste of what’s to come.
Define competitive challenge broadly including digital platforms
I just want to add, just remind that we don’t define the competitive challenge as just a pricing challenge. We also define it much more broadly with efforts to expand our digital platforms, our reach to our customers, our marketing message all those things where we can communicate our differences and our quality. So keep that kind of in the context as you think about the competitive question.
Seeing a lot of opportunities for 365 stores
Well, we’re seeing a lot of opportunities for 365 stores just like our Whole Foods stores. And we’re also finding that we’re able to acquire these stores on very favorable rents, less in general than our Whole Foods Market stores. We have quite a few of our 365 in development in Southern California and but it’s just — it’s not necessarily by design. We’re looking everywhere and we’re — the plan is to try and cluster stores, 365, where possible, and we’re doing that in Southern California. But we also have leases in other isolated markets as well.
365 stores will leap frog ahead on best practices
Also, one of the things perhaps not fully appreciated is that the 365 stores are going to leapfrog ahead on many of the practices that we will be evolving in Whole Foods Market. We can put them in. There’s no culture. There’s no legacy there to overcome. So we can go radical on 365 stores and assuming those are going to work as well as we think they do. They will serve to help accelerate transformation within the mother brand, Whole Foods Market. We’re proceeding as rapidly as we think is prudent at Whole Foods Market, but with 365 stores we won’t have anything holding them back. So in some ways we think they represent the future for where Whole Foods Market will be evolving. So of course, we’re going to encourage people to take a look at those stores when they’re open.
Whole Foods will be larger footprint move prepared foods, more differentiated
One of the things that you can expect to see going forward particularly as Whole Foods Market is in this transformational shift is you’re going to see the Whole Foods Market stores, they’re going to be larger stores. They’re going to have a lot of innovation in them. There’s going to be a lot of prepared foods. There’s going to be a lot of exciting things about those stores. That’s why when you talk about downtown Miami or downtown LA, we’re talking about fairly large stores that are really exciting, fun stores to be in.
With the 365 stores opening now, they’re going to take the smaller footprint, be very curated product mix, very focused on creating value for customers, a convenient, quick shopping experience. So over the long run you won’t see small Whole Foods Market stores open up. That’s going to be the purview of the 365. It’s going to give 365 stores can go into a lot of markets we think Whole Foods can’t go in with these bigger more exciting boxes. We’re going to work for the Whole Foods Market Stores to be very differentiated with a much more exciting experience than our competitors bring.
So that’s kind of our basic strategy and we’re working now in real estate and we have a — it’s not going to be perfect for a while because we’re working through some stores that are in the queue, but as we go through the real estate process, the smaller stores that come through real estate now are being slotted to be 365 stores and a larger, exciting stores particularly in urban densely populated urban areas are going to be Whole Foods Market. We think we’ve got lots of growth room for both concepts and we’re particularly excited to get those 365 stores open because I think people are going to take a very different perception of our company.