Adventure in Retailing XIII:
The Fresh Market
Ross M. Miller
Miller Risk Advisors
October 11, 2010
I do not particularly enjoy writing commentaries about grocery stores,
but that is about all that seems to be able to thrive in an otherwise
declining bricks-and-mortar world. Almost everywhere I go in the physical
world, empty stores are being a more common site and new stores are fewer
and farther between. Part of it is the overall economy, and part is that
online shopping is cheaper and easier than going to stores for many people
(myself included). While groceries can be purchased online, they are one
category that benefits greatly from a physical presence.
The new store in town up here is The Fresh
Market, the first New York
state store in a chain of high-end groceries that are mostly in the
Southeastern U.S. The store is part of a major renovation of a poorly
located strip mall at the intersection of Routes 9 and 155 in Latham, New
York. The store is about 2 miles north of affluent Loundonville on Route
9. It is relatively far away from most of the other relatively well-to-do
areas that are scattered about the Capitol Region.
The concept behind The Fresh Market is a simple one, it is like the
market in Manhattan's Grand Central Terminal (or the one that used to be
in Fanueil Hall), but with a single owner and a single checkout. It has a
flower shop, produce market, bakery, fish counter, meat counter, deli,
sushi bar, coffee/nut/chocolate shop, cheese shop, etc., all under one
roof with a single checkout. While it is cannot rival the two local
chains, Price Chopper and Hannaford, as a one-stop shopping destination,
it does try to carry somewhat more than a convenience store in the general
household and grocery area. Its prices approach the Whole Foods (a.k.a.
Whole Paycheck) realm and well above anything else in the area.
At first glance, The Fresh Market is like a nano version the legendary
(and long defunct) Jamail's market in Houston, that Texas
Monthly called the best grocery store in America (and that ain't no
Texas exaggeration). Jamail's was a gigantic
(for the time) grocery store near the ritzy River Oaks section of town.
Like The Fresh Market, its services included taking the grocery from your
cart, bagging the, and taking them out to your car. Unlike the Fresh
Market, Jamail's had everything imaginable on its shelves. I was on a Pop Tarts jag
back then and Jamail's had varieties of Pop Tarts that I never knew
existed. I infrequently visited Jamail's, however, because not only was it
inconvenient, but I felt out of place there. The problem was not that the
store was jammed with oil barons; rather, it was jammed with their domestic
help. No such problem here in the Albany area.
Sadly, The Fresh Market is not Jamail's, but then again, nothing is
anymore. Before delving into The Fresh Market's numerous problems, it is
worth noting that I like the place a lot and expect to be an frequent customer of it until either it goes out of business or I get tired of it.
Its produce is very good, almost as good as Whole Foods (but without the
visual splendor of Jamail's, where the grocery staff would constantly
straighten up the displays). Its meats are superb, essentially fine
restaurant quality. Its store brand soups are fantastic as well. Weak
areas are the deli area (some obscure private label cold cuts that might
suffice in Atlanta rather than the obvious choice of Boar's Head), the fish
counter (poor selection and some questionable items), and the sushi bar.
The cheese is also uninspired, and unlike Jamail's it does not have a
separate temperature-controlled cheese room, not that any of their cheese
The store has a severe structural issue that could be a deal-killer;
its aisles are way too narrow by local standards, not much more than the
width of two carts. In theory, shoppers in both directions could pass
each other; however, the local crowd is used to shopping in store with
spacious aisles, not those reminiscent of a Food Emporium on the Upper
East Side. Hence, the locals park themselves in mid-aisle while chatting
on their phones, making passage
impossible. The situation is even worse between the meat and deli counters.
When sufficiently corpulent customers are waiting for
their orders, no one can get by at all. This is inexcusable in a part of
the country when retail space is in massively vacant and should be dirt
cheap; indeed, The Fresh Market is currently the only major occupant of their strip
mall and they take up only about 20% of its overall footprint.
narrow aisles were a problem the first few times I visited the store, once
the novelty wore off, so did the crowds. On a recent visit, I heard the
checkout clerks talking about how they had only 100 customers on the
previous day, which was a summery Thursday in mid-September. Doing a
quick financial analysis of the place, if it is not busy enough to have
the aisles crowded much of the time, then it won't be able to cover even
its fixed costs.
As a finance professional, I have to wonder what Fresh Market
headquarters was thinking when they placed a store in New York's Capital
District. The demographics of the area is not particularly upscale and is known for its thriftiness, Dutch origins and all that. Then
there is the matter of the track record of upscale retailers, and grocers
in particular around here. When I arrived in the area there was Cowen & Lobel in
Stuyvesant Plaza. It was a traditional gourmet shop, like Cardullo's in
Harvard Square. It struggled and ultimately closed in 2001. A few years
later here in Niskayuna, a Fresh Farms market (no relation to Fresh
Fields, now part of Whole Foods) opened and closed less than six months
later. Fresh Farms had a massive store located in a defunct Grand Union
store that had good produce and a killer salad bar that I got lunch from
every weekday in the early days of these commentaries. High-end
electronics stores have met a similar fate here. The death toll since I
have been here in that category is three, including a Tweeter.
Interestingly, it turns out that I am one of a fairly large group of
Capital District folk who are fans of Trader Joe's. Every two months or
so, I just happen to pass by one in my travels and I stock up with a cart
or more of goodies. Trader Joe's is an entirely different experience
from The Fresh Market. The overall quality of the goods is a bit lower
than the Fresh Market and the ambiance is utilitarian, but the prices are
much lower, even lower than many comparable items at the big chains. For
some products Trader Joe's just massacres The Fresh Market on quality; its breads
outclass The Fresh Market's meager offerings. It is mystifying that The
Fresh Market located here, but Trader Joe's avoids us like the plague.
Next month I will go back in time to 1980, when I could actually visit
Jamail's and the U.S. was in an even bigger mess than it is now.
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