Losses at Whole Foods Market narrowed last year, as the premium retailer’s push towards value increased footfall at stores.
Revenue grew 2% to £93.1m across its seven London stores in the year to 31 December 2023, thanks to higher sales volume. However, a 2% increase in expenses, which grew to £26.3m, mainly due to staff costs, as well as an onerous lease charge of £1.4m due to several of its stores underperforming, caused its gross profit margins to slip.
Gross profit margin – a key performance measure for the Amazon-owned grocer – slipped from 36% to 35% overall. Overall, Whole Foods’ pre-tax losses were £23.1m, down from £26.2m.
While they have narrowed, the accounts are the latest in a series of losses for the premium US grocer, which has struggled to make an dent in the UK grocery market since its acquisition by tech giant Amazon in 2017.
Whole Foods has traditionally specialised in listing challenger, premium and organic brands, all of which must adhere to its strict product guidelines. However, in a bid to attract shoppers back to its stores, it began increasing the number of “lowest priced” and value lines in its stores. This also included a new signage campaign highlighting selected products with ‘Low prices, Same high standards’.
“We are conscious in terms of developing the various price points so that it is accessible to shop in Whole Foods and that you feel like you’re getting value,” Whole Foods UK director of purchasing and operation Jade Hoai told The Grocer at the time.
The retailer has made efforts to cuts its losses further during the current financial year, shuttering two stores Richmond and Fulham, and a distribution centre in Dartford in March. The savings would pave the way for a new expansion programme of 75 new stores globally, including a new UK site in Chelsea, London set to open next year, the retailer said.
It also announced further plans to broaden its grocery offer in order to win back UK shoppers, by stocking 141 ‘staple’ British brands including Heinz Beanz, Cathedral City cheese, Ambrosia and Sharwood’s.
The Grocer has contacted Whole Foods for comment on the results.
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