- If Whole Foods struck a similar deal with
- Kohl's has about 1,100 stores and it has already cleared out space in as many as 300 of them for other retail partners.
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Kohl's could be the unlikely key to Whole Foods reaching millions of new customers — and it's 'vastly negative' news for Kroger (KSS)
A partnership with Kohl's would expose Whole Foods to millions of new customers and turn it into a bigger threat to companies like Kroger and Walmart.
Kohl's is bringing the discount grocer Aldi to as many as 10 of its store this year in a pilot test, the company said Thursday.
If Whole Foods struck a similar deal with Kohl's involving its lower-cost chain of stores, 365 by Whole Foods Market, it could expose the grocery chain to tens of millions of new customers, turning it into an unstoppable threat.
"A Whole Foods/Kohl's relationship would introduce new customers to the Whole Foods concept and could meaningfully increase the number of households shopping at Whole Foods, which we currently estimate at 8 million — well below Kroger at 60 million and Walmart at 100 million," Barclays analysts wrote in a research note published Friday.
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"Meanwhile, it would be vastly negative for the grocers — not only would Whole Foods be accelerating its unit growth but a partnership of this type would also be a clear signal it's looking to broaden its base of shoppers," the analysts added.
Amazon-owned Whole Foods and Kohl's haven't said whether they are pursuing this kind of partnership, but the move would make sense for both companies.
Kohl's is already partnering with Amazon in another way. The retailer recently started selling its devices in stores and offering free returns for Amazon products
Meanwhile, Whole Foods is trying to appeal to a broader array of customers through lower prices and potentially a wider array of consumer packaged goods like Coca-Cola.
Opening beside Kohl's stores would give Whole Foods immediate access to the bargain-hunting customers that Kohl's attracts. It would also give Whole Foods a lower-cost way to expand its 365 chain, since it would be moving into existing buildings rather than paying for new construction.
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