I wouldn’t describe Fresh Market or Trader Joe’s as “natural food chains,” precisely…but they both serve a different market than a conventional grocery chain or supercenter. (And they both differ from Whole Foods in some key ways, including their location strategies.) Both stores offer tightly focused assortments in relatively small footprints, and neither store is trying to compete in the low-margin world of the traditional food retailer. (Joe’s specializes in a vast array of its own packaged goods, Fresh Market in produce and other categories meant to be cooked and eaten today.) Both stores have a chance to expand and thrive if they stick to their brand positioning instead of aspiring to be “the next Whole Foods.”

It would seem almost counter intuitive that higher priced, fresh oriented stores like Whole Foods and Fresh Market would flourish in the extended economic downturn. In a time of economic downturn, however, shoppers have demonstrated the propensity to shop multiple stores for all of their needs. Capitalizing on this trend, Fresh Market, Trader Joe’s and Whole Foods have emerged as the leading destinations for fresh quality and variety for many shoppers who still shop a traditional supermarket or “price” retailer for their center-store category needs. Shoppers are learning to expand their consideration set of stores in the grocery channel at an unprecedented rate and Fresh Market is certainly one of the larger beneficiaries of this shopper behavior. There are caveats. Fresh Market smartly places stores in more upscale neighborhoods and retail centers. Mid and downscale locations are likely not compatible to their format. Like any other retailer, they have competition. If there are Whole Foods, or even some of the better fresh operators traditional like Harris Teeter, Wegmans, Mariano’s, et al, in the market, Fresh… Read more »

I haven’t been inside a TFM store, but plenty in Whole Foods, Trader Joe’s, Sprouts and the conventional grocery chains. The two types are separated not only by the layout, visuals, and assortment, but also by the shopping experience with energetic and helpful associates. The trajectory in grocery is going away from traditional supermarkets that are center-store heavy and more to a healthier (real or perceived) selection of foods, especially in perishables, and offering certified organic and non-GMO options to a customer base that is increasingly sensitive to health and overall wellness. Do natural food chains fill different niches? Yes and no. When Sprouts opened in our valley, they took foot traffic away from Whole Foods but not from Trader Joe’s. Once Whole Foods sharpened their prices, they got some of that back. There’s overlap in assortment, but each chain projects a different shopping experience and image. There’s still plenty of room for growth at both ends of the population trends: Boomers that are more health conscious as they age and Millennials concerned with Fair… Read more »

There is certainly increasing demand for natural, organic, specialty, and local foods. The larger question in my mind is whether the U.S. and global economies are going to grow enough over the medium and long term to support consumption of more expensive food, or whether shoppers will retreat to the basics out of necessity.

These stores can grow only if they follow the money. None of these stores would survive two weeks in my town, as it is very poor, but for the high-end cities and college areas, it is a good fit. Whoever wins must have the service to back it up.

I think the popularity of specialty grocers is a direct manifestation of the bifurcation of the US consumer group. While many households are struggling to meet their weekly budget, others are looking to buy the best quality they can find. The result is that specialty markets will thrive with the households who have extra spending capacity and there will always be room for the “next big thing.” The challenge is that these consumers have much higher expectations and are likely more fickle than the everyday consumer. The emphasis has to be on service, including home delivery and charge accounts. Labor hours are going to be higher and facilities must be well maintained. The question then becomes can they be operated profitably? Only time will tell.

This seems like a trick question: some can — and I guess you can argue that most have the potential to be the ones that do — but obviously most cannot. It’s no different than asking if most teams can win the World Series or saying anyone can be POTUS (maybe, but EVERYone cannot).

Specialty grocers are a very unique sector of the US economy and should be considered as such when examining trends and their progression into the future. Specialty grocers are stuck in similar situations with pricing as many other environmental advancements such as solar panels. The prices are high because producers and retailers are only putting out a small amount of supply along with a lack of advancement in technology and development in efficiency within the field. A lack of supply prevents larger strides in progress with the level of technological advancement and efficiency. Produces are only putting out a small amount of supply because of the high costs of production (which could be curbed by progress in technological advancement and efficiency) and small demand. Keeping a more long term and Macroeconomic frame of mind at hand leads to the conclusion that ‘competition’ amongst specialty grocers is really more of a symbiotic relationship rather than a predatory one. One of the unique aspects of specialty grocers in contrast to supermarkets is the higher level of involvement… Read more »

TFM is the perfect compliment for that “Costco” upper middle class shopper to do fill in trips between those big Costco trips. Small store, not much space wasted on dry goods those folks pick up at Costco. TFM will only work in certain locations, but it has a niche and this is a niche that as long as they can maintain quality and execute well (and I saw problems already in one of their new stores, like a slight odor in seafood and being sold some doughy cookies in the bakery, not to mention an indifferent cashier), they will do very well. It is a great format. It is a format that some conventional grocers would be wise to copy, and fast. Perfect for upper middle class areas where the real estate cost is high.

I think The Fresh Market’s brand, identity and concept has room to expand. My first experience, as a busy working mother, was walking into my local TFM determined to feed my family a delicious, healthy dinner. (My husband does most of the cooking in our household.) As I selected some fresh fish, the seafood manager and I chatted. He didn’t push. I was astonished when he not only described a preparation and side dish, but also came out from behind the counter, walked me through the store to find ingredients, and wrote it all out for me. Intensive customer service like that is expensive, but I’ve held onto this positive experience and so return to shop at The Fresh Market. I believe TFM, Whole Foods and Trader Joe’s are sufficiently differentiated. Their growth will likely come at the expense of traditional grocers who don’t adapt to changing consumer tastes and preferences. Retailers can rise and fall quickly. Those who are clear about who they are and deftly deliver on that particular brand, experience and value… Read more »

Competing with Publix is tough. No one is better at customer service and commitment to the local community in the south than Publix.