Dive Brief:
- The Fresh Market says it plans to close 15 underperforming locations following an organizational analysis of its 174-store footprint. The locations will shutter over the next two to four weeks.
- The closures will happen in nine states: Georgia, Illinois, Indiana, Kentucky, North Carolina, New Hampshire, Tennessee, Virginia and Wisconsin. The move follows The Fresh Market’s decision earlier this year to halt new store growth and focus on its existing locations, as reported by Winsight Grocery Business.
- “Over the last eight months, our company has been executing a turnaround plan and we’ve seen great progress. However, for a variety of reasons unique to each retail location, that progress is not evenly distributed and, as a result, we have decided to close these long-term underperforming stores,” said Fresh Market CEO Larry Appel in a statement.
Dive Insight:
The Fresh Market is in a tough spot these days. An upscale grocer with 176 locations across the eastern U.S., it lacks a unique selling point as it faces competition that’s offering a lot of the same natural and organic products for less.
By and large, upscale specialty grocers are performing quite well these days. But these are mostly local and regional chains that have deep roots in their communities. The Fresh Market, by contrast, has stores spread across two dozen states. It lacks operational efficiency and customer awareness and has struggled to differentiate itself on assortment.
In 2016, Apollo Global Management acquired the chain, and since then it has taken a more careful approach to growth while also trimming underperforming assets. The company closed five stores last year and 18 the year before, including all of its locations in Texas, Missouri, Iowa and Kansas.
Under previous CEO Rick Anicetti, The Fresh Market launched a store remodeling campaign, which includes an expanded center store section with more everyday items — including household and baby products. It’s also reinforcing its natural and organic image with more locally sourced products, prepared foods and health market selections.
Under current CEO Larry Appel, a Winn-Dixie veteran, The Fresh Market seems to be more focused than ever on operational efficiency. Like many other chains, it wants to make its existing stores as relevant as possible rather than spending heavily to expand in saturated markets.
The company will no doubt hope this approach can pay dividends. Financial analysts have not looked favorably on the company: Late last year, Moody’s downgraded The Fresh Market’s corporate family credit rating in October to Caa1 (very high credit risk) from its previous B3 rating, citing a negative outlook for the chain.
