Dive Brief:

• Fresh Thyme Market will close its last three stores in Nebraska, the grocer confirmed via email following local reports.
• In a statement, Fresh Thyme's President, Gerald Melville, said the company will close its two remaining Omaha stores and one in Lincoln on Oct. 16. “All successful organizations continually review their performance and look for ways to improve," he wrote. "After many months of intense focus and support of these stores, we have made the decision to close them."
• Fresh Thyme’s withdrawal comes amid a challenging time for specialty grocers. Last year, the company closed two stores in Nebraska and one in Iowa, and in July closed a store in Menomonee Falls, Wisconsin. Earth Fare and Lucky’s Market filed for bankruptcy earlier this year along with Fairway Market, while Whole Foods has struggled to boost sales.

Dive Insight:

Fresh Thyme rode into Nebraska with high hopes. It planted its first location in Lincoln in February 2016 followed by a store in Omaha later that year. It opened two more Omaha locations on the same day in early 2017 and added a fifth store in Grand Island in 2018.

But the company beat a hasty retreat after the stores didn’t live up to expectations. The Grand Island store closed last year, along with the Lakeside Omaha store, and now the company is closing down its last three locations in the state. 

While most specialty chains have focused on growing along the coasts, Fresh Thyme has centered its development in the Midwest. States like Nebraska and Iowa are less competitive for food retailers, but also have less wealth and lower population density, Jay Jacobowitz, president and founder of Retail Insights said in an interview last year.

Fresh Thyme, which will operate 70 stores across 10 states following these latest closures, has seen sales increase during the coronavirus pandemic and is working to stay relevant with shoppers. In August, it updated its logo and shortened its name. It also rolled out a marketing campaign under the concept “This is Real,” centered on the grocer’s customers.

"The ad emphasizes that as the world continues to change, it has become harder for people to know what is real," the company said in a press announcement. "In the midst of it all, Fresh Thyme shoppers are quietly taking control of their health and wellbeing by eating real, healthy foods."

Specialty grocers have seen sales rise significantly during the pandemic, raising the possibility of a rebound for the sector. Even Earth Fare is staging a rapid comeback. But results from the likes of Sprouts Farmers Market and Whole Foods have been dwarfed by supermarkets that have capitalized on the one-stop shopping and low-price appeal.

Failing to differentiate from conventional grocers is in part what’s ailing natural and organic retailers, experts have said. It will be up to Fresh Thyme and others to compellingly differentiate themselves from the likes of Kroger and Albertsons going forward.