After coming back from bankruptcy under new ownership in 2016, Fairway Market is up for sale again.
Fairway Market, a grocery store chain founded in the early 1930s, filed for Chapter 11 bankruptcy in 2016. Its 2013 IPO was succeeded by three unprofitable years. Its debt, originally $300 million, was reduced to $84 million, bringing it under control of its lenders, which include Goldman Sachs. After another debt overhaul in 2018 with a five-year plan, Moody’s Investor Service predicted another restructuring within 12 to 18 months, citing Fairway’s small scale compared to larger chains.
While Fairway occupies prime locations in Manhattan, it’s seen pressure by the growth in the city of competitors like Trader Joe’s and Whole Foods. Fairway’s strong organic and gourmet offerings that historically have given it an edge over more basic chains in that market segment are now being rivaled by the substantial offerings of this kind in increasingly popular, much larger chains like Trader Joe’s and Whole Foods. These chains also have the advantage of substantially more resources via their broader nationwide presence.
- Latest: Fairway Will Close SOME Stores
Startup delivery services like Seamless have also grown substantially in popularity, stemming both from the rise of service-based apps, and customer subsidies by these companies to incentivize user growth and retention. The growth of these apps, which has been largest in major cities like Manhattan, has further cut into the grocery industry as a whole. Furthermore, food subscription apps like FreshDirect have compounded this problem.
Fairway continues to grow in the areas around New York City, including New Jersey, Long Island, and Connecticut. It currently operates 15 grocery stores and four wine stores in the New York Metropolitan area. In June of this year, Fairway opened a cooking school at its Upper West Side location. It has also partnered with the delivery apps Shipt and Instacart to compete with the increasingly delivery-focused food industry.
After its bankruptcy, Fairway surprised many when it was able to keep almost all of its locations open in the coming years.Join the Upper West Side Newsletter: