I read a sad article this past week and it’s the topic for our Foodie Friday Fun today. Fairway is one of my favorite markets. In addition to having a huge selection of groceries and produce, both organic and non-organic, the prices for most things are reasonable. The store began as a fruit and vegetable stand in the early 1930’s and has grown into a chain of fifteen stores spread across the New York Tri-State area. That expansion, however, didn’t begin until the mid-1990’s, and really only took off after the chain was purchased by some private equity folks.
(Photo credit: Wikipedia)
According to the article I read from Grub Street, the chain is in dire straits. It has a huge amount of debt and, as the article says:
Almost everyone agrees that a confluence of issues — including an overly aggressive and poorly executed expansion plan and rising competition in the quality-produce business — are the reasons Fairway is now in crisis. “It was a perfect storm,” says a former executive for the company.
Those are lessons for any business. First, the systems that support one or two stores were inadequate to support many more. The chain is having issues managing its inventory, and as any retail business knows, inventory management can make or break the operation. The Point Of Sale system was antiquated, further compounding the inventory problem (how can you manage supply when you don’t have an accurate picture with respect to what’s selling?). Most importantly, the market changed.
One of Fairway’s primary appeals was the availability of unique ingredients and products. They have extensive meat and fish departments that often provide hard to find cuts at good prices. The problem is that others are now doing the same and Fairway rested on their laurels rather than pushing to stay ahead of the pack. All of those issues might be found in any business that allows success and rapid expansion to disrupt the processes and execution that brought that success in the first place.
It’s easy to think that it can’t happen to your business, and it won’t as long as you continue to attract talented, knowledgeable staff (Fairway couldn’t find enough to keep up with expansion), pay attention to your systems, execute well, and listen to the market (and your customers). Easy to say, I know, but that’s why they call it work!
Consult Keith 