The Times ran an article this past weekend on the rapidly plummeting growth at Fairway Markets, a popular grocer in the tristate area. Fairway had planned to expand coast-to-coast, and go against larger national chains, but has faced serious headwinds. The article notes:
Competition in the organic and specialty-food retailer space had intensified. Whole Foods and Trader Joe’s were expanding rapidly, and traditional grocery stores were also increasing their organic offerings and stocking hard-to-find items.
The article makes it seem as though Fairway’s principal competition is Whole Foods and Trader Joe’s – they are, but only to a certain extent, and I would argue that Costco, Walmart, and Target present a serious challenge, as well. Whole Foods is not without its obstacles – including a plummeting stock price – as it faces competition from conventional groceries and big box stores, and has begun to move down market with its planned chain of cheaper “365” stores. As I’ve noted before, Costco is the biggest player in the organic sector, and if stores like Whole Foods and Fairway have whetted consumers’ desire for organics and more gourmet items, then Costco has cheaply sated it.
Silicon Spatula 