Dive Brief:

• Fresh Thyme Farmers Market will close three stores in mid-November, according to local reports. The company will close two stores in Nebraska, one located in Grand Island, Nebraska that opened last February and another in Omaha. A store in Ames, Iowa, which opened last year, is also slated for closure.
• These closures follow two others that took place over the summer. One store, which opened in 2015, closed in Dayton, Ohio, in July and the other closed in Louisville, Kentucky, in August, local media reported. It opened in 2016.
• Fresh Thyme did not immediately respond to Grocery Dive’s request for comment. According to reports, the stores that have closed and are scheduled to close were not performing as expected and sales volume was low.

Dive Insight:

Jay Jacobowitz, president and founder of Retail Insights, told Grocery Dive he doesn’t see Fresh Thyme’s closures as a sign of more troubles ahead, but a signal that the company is running up against the natural limitations of expanding quickly in the Midwest, where he said there’s less wealth and population density.  

Fresh Thyme has been one of the few natural and organic grocers to focus its growth in the Midwest. Jacobowitz said Whole Foods has typically targeted more affluent and higher density areas, while Sprouts began in the western U.S. and headed southeast for expansion. Other specialty grocers like The Fresh Market and Earth Fare have also focused on coastal expansion, while Lucky's Market has lately focused on expanding in Florida.

Fresh Thyme, which began operating in 2012, hasn’t reported any store openings recently, but earlier this year said it planned to open four stores in 2019 after expanding to 75 locations in 2018. 

States like Indiana and Missouri provided Fresh Thyme with its own territory to stake out, but fewer direct competitors doesn’t ensure success for the natural grocer. "Inevitably they might be able to find a space, but the population density just isn’t there to support it," Jacobowitz said. 

Natural Grocers, which has over 150 stores including several in Midwestern states like Kansas, Iowa and Missouri, could be a notable challenger to Fresh Thyme. The company has six stores scheduled to open this year, according to its website.  

Fresh Thyme provided this statement from Chris Sherrell, the chain's president and CEO, to multiple media outlets reporting the closures: "Like any organization experiencing rapid growth and expansion, sometimes we need to optimize our approach and make changes if something isn’t working. We are continuing to refine our real estate strategy, but sometimes certain stores are simply not as successful as others."

In June, Fresh Thyme announced changes to its leadership team including the promotion of Dean Little to chief operating officer and the hiring of Tod Pepin as chief merchandising officer. The changes were billed as a way to bring fresh ideas and innovation to the growing company.