Are 365 by Whole Foods' automated kiosks the future for grocery stores?
This week Whole Foods opened its first younger, hipper and cheaper brand in Silver Lake, 365 by Whole Foods. Dubbed a "chain for millennials," the store replaces many human workers with robots and computerized kiosks, something that will likely become increasingly common as labor costs rise and California moves towards a $15 minimum wage by 2022.
"Most grocery stores can’t afford to pay people $15 an hour," said David Livingston, a Wisconsin-based grocery store analyst. "It doesn’t work."
The 28,000-square foot 365 by Whole Foods store in Silver Lake employs 110 people, while the 41,000-square foot traditional Whole Foods in downtown Los Angeles has a staff of 230, said company spokeswoman Janette Rizk.
"The 365 team looked at every opportunity to increase efficiencies across the business to remove costs and pass along savings to shoppers," Whole Foods spokeswoman Janette Rizk said in an e-mail. "You’ll see this in the tech and self-service innovations offered in the store – things like minimal printed signs and electronic shelf labels, ordering kiosks and even an application called Banquet by Delectable that allows shoppers to scan bottles of wine and spirits for descriptions, plus reviews and pairings."
The traditional meat and seafood counter where customers order specific cuts is gone. It's been replaced by a case of pre-packaged goods. Customers type in what they want on a kiosk that resembles an automated check-in station found in airport terminals.
At the front of the store, customers can order a first-of-its-kind robot - called a teaBOT - to prepare customized cups of $3 tea.
"After talking to tea enthusiasts, we found that many tea drinkers love the idea of making their own blends but find it too tedious, expensive, or risky to do this at home," the company says on its website. "We decided to make this easier for everyone by building a robot that blends tea."
Shoppers at the new 365 by Whole Foods had mixed reactions to all the automation.
"It's more convenient and more easy," said Denise Kim.
"I don’t like it," said Maya Ivanar, standing next to a kiosk near the cash-registers. "I miss looking at what I’m ordering and talking to the person.”
Whole Foods is opening more 365 stores in Lake Oswego, Oregon, and Bellevue, Washington later this year. Up to 10 stores are expected to open next year, including in Santa Monica, Claremont, Long Beach and North Hollywood.