Whole Foods
Customers shop in the produce section at the Whole Foods grocery story in Ann Arbor, Michigan, March 8, 2012. REUTERS/Rebecca Cook

Organic foods grocery chain Whole Foods is hoping to change its image and attract a younger generation by opening a separate chain of lower-cost stores aimed at Millennials.

According to USA Today, the company made the announcement on 6 May during its second-quarter earnings release. Shares for the grocery brand fell after the poor earnings announcement and continued to fall on 7 May, dropping nearly 10% to $45.29.

Whole Foods, which has earned the nickname "Whole Paycheck" for its expensive products, is known for its organic and natural food selection. The company, however, has been losing its appeal as organic products have become readily available in other mainstream grocery stores, USA Today noted.

By offering a lower-priced chain, Whole Foods will be able to attract younger customers who favour the brand's social and ethical viewpoints but not its prices. Neil Saunders, CEO of retail consultancy Conlumino, told USA Today, "[Whole Foods] still has a problem on price," adding: "Millennials just don't have the disposable income to make that their destination of choice for grocery shopping."

Co-chief executive Walter Robb said the new stores will have "modern, streamlined design, innovative technology and a curated selection" that will not only appeal to Millennials but "to anyone looking for high-quality fresh food at great prices".

The Austin, Texas-based company has already started negotiating leases for new stores, it said in a statement. It expects to begin opening them next year and a "fairly rapid" expansion, NPR reported. Robb told reporters: "This marketplace continues to grow and explode, and I think we think by creating a second growth vehicle for our company, we can boarded the accessibility to fresh, healthy foods."

Whole Foods has 399 stores in the US, 10 in Canada and nine in the UK. According to USA Today, the company plans to open at least 100 more stores.