Farm Fresh has closed two stores in Greater Williamsburg in 2017, and one expert thinks that could be a sign of things to come for the company.
The moves come as Publix is planning its first location in the Historic Triangle. For Farm Fresh, though, the chain’s footprint is shrinking. Farm Fresh recently said, through a spokesperson, it will be closing its store in Kiln Creek, located at 200 Arthur Way in Newport News, by the end of December. Its pharmacy is already closed.
Farm Fresh closed its store on Merrimac Trail in October.
“Farm Fresh continually reviews its business and operations and while we strive to ensure the success of all our stores, it is occasionally necessary for us to make decisions to not operate in a certain location,” Mike Wilken, manager of external communications and public relations for parent company SUPERVALU Inc., said in an email. “As part of a recent review, Supervalu negotiated an early lease termination at our Farm Fresh Kiln Creek location and will be closing its pharmacy by December 1 and the store to the public by the end of December.”
Wilken also thanked customers for their business and invited them to visit other Farm Fresh locations on the peninsula, including two located within six miles of the Kiln Creek store.
According to an academic who follows the grocery industry, the reason for the closings is pretty simple.
“It’s getting very competitive and the low-priced guys are here, the high-price guys are here the middle of the road is here,” said William & Mary Raymond A. Mason School of Business Professor Lawrence Ring. “Farm Fresh is right in the middle of the road and that means [competitors] are taking a piece out of them from every side.”
The stock prices of SUPERVALU Inc. have fallen to their lowest point since 2012, according to TheStreet.com, and SUPERVALU reports its stock prices have dropped roughly $15 since the beginning of 2017. A corporate quarterly report informed investors that the company’s falling sales are the result of competition in the grocery business.
“Management expects operating results will continue to be impacted by the effects of operating in a highly competitive and price-sensitive marketplace,” stated the company in its quarterly report, known as a 10-Q, for the quarter ending Sept. 9, 2017. “Retail segment continues to be impacted by price competition, competitive store openings and a challenging sales and operating environment. This environment contributes to lower sales from identical retail stores.”
SUPERVALU employs 30,000 people across more than 2,000 stores, according to the company’s website.
On the peninsula, the field of grocers is crowded, Ring said; there are low-price retailers such as Walmart and Food Lion, quality service providers such as Trader Joe’s, discount stores such as Aldi, dollar stores, and pharmacies that sell groceries, such as CVS.
In such a competitive market, a “traditional supermarket” like Farm Fresh may struggle to attract and retain customers, Ring said.
Farm Fresh/SUPERVALU did not respond to a request for additional comment on its most recent store closing.
Still, to succeed in a market with so many options, grocers need to be the “est” at something, Ring said. “Either the lowest prices, or the highest quality, or the best service, or be the easiest one to get to, or the widest assortment… You need to be best at something.”
“These days, second-best doesn’t do very much for you,” he added.
