An overview of the new 365 store in the Silver Lake area of Los Angeles.
Originally published on Forbes.com
By now everyone who shops for food, or is in the supermarket industry has heard, read or seen images from the first 365 by Whole Foods store that opened last Wednesday in the Silver Lake section of Los Angeles. Images of scores of soon to be customers lined up for the opening and some even dancing to a DJ’s spins. Cars were directed out of the parking lot to find space on side streets. The media, and no doubt Whole Foods executives, had a PR field day. Of course no one seemed to point out that the opening coincided with Memorial Day, one of the busiest grocery shopping holidays of the year.
I decided to visit the store one week later to see how it was faring after the initial opening.
Let’s start in the parking lot. Many news outlets reported how the 365 parking lot was overflowing and people just waiting to get in. That’s true, and on my visit mid-day yesterday I counted six parking lot attendants directing traffic and signaling when a spot opened up. The reality is that just like many other Whole Foods I’ve visited across the country, whoever does the site selections always seem to find locations with undersized parking areas. The one in Silver Lake is just two rows long, and I would guess had around 100 spaces. The store is also in a strip mall with other stores who share the parking.
Entering the store is surprising. The 28,000 square feet actually looks much larger than it really is, (according to the Food Marketing Institute the median supermarket size in 2014 was 46,000 sq. ft.), with wide aisles, a high vaulted ceiling and lower than average height shelving giving one an almost complete look at the store and all the shoppers in the store in one glance. A good move that makes a shopper feels a part of the community.
365 is being promoted as a store for Millennials. The customers I saw this day ranged from a few hipsters to a few seniors to a lot of what appeared to be 40 to 60 year-olds of all genders, shapes, sizes and colors. Yes, they have added some cool millennial foodie tidbits, like a self-serve Teabot, which is a loose tea machine that custom blends a ready to drink cup of tea. Integrated in the unit is a credit card reader so you can pay for it on the spot.
The concept is good, but I think they would fare far better if the Teabot just allowed you to custom blend the tea to take home rather than one cup to drink in the store. Another is the Juicero, a pod-based machine that I just reported on for home use, that squeezes already cut fruits and vegetables in chilled packages for $5 to $10 a serving. I didn’t see anyone using either machine or frankly, even noticing them.
While I stood at the entrance taking it all in, I observed three people that poked their heads in, saw the checkout line and walked out. The checkout line is a queue, similar to what you see in a Military Commissary or bank, and actually moved rather quickly – but at first glance it did appear you could be in line a long time. One easy fix would be to install the QueVision system that Kroger started using back in 2013 that uses infrared sensors coupled with predictive analytics to estimate waiting in line times on an overhead screen. I saw no full shopping carts at the checkouts, or any customer carrying more than one bag out of the store. Which makes me wonder if 365 will be more of a fill-in shop than for everyday groceries.
Moving into the center of the store you find the prepared foods self-serve stations typical of Whole Foods, with salads, hot foods and one unique station which has six full size pizzas (made in the store in the back area that is glass enclosed so you can see them being prepared) placed on metal pizza pans that sit on a heated surface to keep the pies hot. Clever idea as you can serve yourself and find that perfect slice of pizza. I tasted two – plain cheese and pepperoni. Neither was hot and both were too salty. Each slice is $3 regardless of toppings. I understand that they are fearful that someone would touch the hot surface and burn themselves, but that’s why there are induction stove tops that clearly solves the problem and would deliver a better slice.
Frozen foods, in many retail outlets including traditional supermarkets have been struggling with declining volumes for the past few years. According to Nielsen, frozen lost 3% of volume just in the twelve months ending May 23, 2015 – for comparison total food sales in supermarkets has been relatively flat. Which is why I question 365’s frozen food cases. The good news is they are horizontal vs. vertical and they allow for a more open feeling in the store, but much like their horizontal brethren, there are doors, sliding doors on the top which might be great to conserve energy, but would be a nightmare for two shoppers who want access at the same time to opposite sections of the case.
And much like the ‘barrier’ that is created by the upright doors, these create the same physical and mental roadblock to purchase. I suppose it won’t matter much as in the hour plus I was in the store, I didn’t see one customer open the case and select any frozen foods to purchase.
Whole Foods’ produce departments have been exquisite showcasing farmers, freshness and high quality that make your mouth water; and as a result you probably buy more produce. Great news for your taste buds and nutrition! I have to question 365’s format. The produce department is actually split into two parts with a glass wall with giant letters that say Fruit & Veg emblazoned in blue and green between. The produce that does not require refrigeration is part of the main selling floor, while the produce that needs refrigeration is on the other side of the glass wall.
There are two openings to get into the refrigerated section both with signs that say, “Come on in.” It makes both departments look smaller, less appetizing and certainly less “fresh.” I spoke with two different female shoppers in the main produce department who had not been in the store before; neither of them realized the refrigerated produce section existed. Disappointing from a retailer that upped the game for all supermarket produce departments.
And then there is the much-ballyhooed Friends of 365 program. On their website the chain posted “Friends of 365 is an opportunity for creative entrepreneurs to operate within our stores and connect with our community. Whether you’re into fast-casual food service, breakthrough retail (body care products, clothing, shoes, housewares, pet, etc.) or cool street services (barber shop, knife sharpening, bike shop, fitness) — if you’ve got a thriving business ready to go all the way live, we want to hear from you.” Originally the page also touted a tattoo parlor, but after much tongue in cheek publicity it seems to have been edited out.
This store has two “friends,” but I’m not sure for how long. Chloe is an inviting, plant-based local foods limited menu eat-in/take-out fast casual restaurant that started in Manhattan. The menu of salads, faux burgers and desserts looks delicious. The staff attentive and friendly. The food amazing. A delightful staff member was outside their entrance from 365 offering samples of desserts and chatting up customers telling them about Chloe. Problem was there was no one eating inside, one person was there reading a newspaper without any food or beverage, and I only saw two customers ordering their foods to go. The other “friend” is a coffee bar, Allegro which is a badly designed uninviting unemotional coffee bar, which actually adjoins the 365’s sitting area where I did see a couple people eating salads and drinking coffee.
No question that Whole Foods should be given credit for trying some new things, and I don’t think 365 will be the answer to their stock woes. This effort reminds of Food Lion’s failed effort with Bloom that appeared to have a new technology just about everywhere in the store for technology’s sake alone, and forgot what people love about supermarkets – the food experience of sights, aromas, and tastes.