Dive Brief:
- Tops Markets is closing its Orchard Fresh specialty grocery store by no later than April 4, according to local reports.
- Tops told the Buffalo Business Journal the closing of the single store in Orchard Park, New York was "a business decision." The retailer said Orchard Fresh's 100 or so employees will be offered positions elsewhere at Tops stores.
- Orchard Fresh opened in 2013 and at the time was positioned as a potential competitor to Whole Foods, but the concept never expanded beyond the single location.
Dive Insight:
Tops opened Orchard Fresh as a testing ground for higher-end food choice options that it could eventually grow and roll out to multiple markets.
The retailer’s spokesperson told The Buffalo News that the store was an effective laboratory for natural, organic and gourmet products that have been incorporated into its existing Tops supermarket format and will be included in future stores.
The main goal for Orchard Fresh, though, was to ride the specialty wave that had lifted stores like Whole Foods, scale up and become a money-maker for Tops. The grocer's financial struggles hampered these plans. Tops had plans to scale out Orchard Fresh to a location in the Buffalo area, but pulled back after entering Chapter 11 bankruptcy protection in 2018.
Location matters, too. Tops placed the Orchard Fresh store in a retail plaza that didn't surround other major retailers so shoppers would have to make a special trip to the store, an industry analyst told Buffalo News. Chances of discovery were also low.
Burt Flickinger, managing director with Strategic Resources Group, also added that Orchard Fresh was a cash drain on Tops, not just because it couldn't find its place in the market but because it was never scaled out. He added that closing Orchard Fresh will give Tops more funds to invest in its existing stores. Last year, Tops announced a $40 million plan to upgrade its existing stores.
Orchard Park joins a long list of failed retail experiments by grocers. On Wednesday, Kroger closed its two Fresh Eats MKT stores in Columbus, Ohio. Specialty grocers are also coming under increasing pressure as conventional grocers build out their natural and organic assortment, with Lucky's Market, Fairway Market and Earth Fare all filing for bankruptcy this year.
