Fairway Market, soon to be opening its seventh location ”“ this one in Stamford ”“ looks to be a major challenger to the market of fresh food groceries in the heart of Stew Leonard”™s country.
“I feel strongly that Fairway is the first real, legitimate direct competition that Stew Leonard”™s has had in this neck of the woods ever,” said Kevin Coupe, grocery industry analyst, author and editor of the Morning News Beat.
Vince Summa, Stew Leonard”™s chief financial officer, however, said his chain is prepared for the competition and is undeterred by competitors coming into the market.
“They are very good on fresh food and have great marketing,” said Coupe. “I think that the biggest challenge to Fairway is you can grow too quickly.”
Howie Glickberg, third generation Fairway owner and CEO, said Fairway is on a schedule to open a store every six months. The last was in Pelham, N.Y., the next will be in Manhattan, followed by Queens and an undisclosed New York location.
The 80,000-square-foot grocery market is to open in the first week of November and is part of the Building and Land Technology Harbor Point development project on the south side of Stamford. The store, currently under construction, is on Canal Street, neighboring The Loft rental apartment units, also part of the Harbor Point project.
Location will draw from 2 counties
“This is a very interesting location,” said Aaron Fleishaker, vice president of real estate and construction. “We”™ll touch parts of Westchester and Fairfield, being right off I-95 means people can stop on their way north or south.”
Fleishaker said the building process for the new store has been moved from the typical six months to four months. “We want to be open for the holidays,” Fleishaker said.
According to Coupe, Stew Leonard”™s began to prepare for the entrance of Fairway into the Fairfield market two years ago.
“They refurbished all their locations and stepped up their fresh food game, adding placement and product,” he said. “For the last two years they”™ve been acting as if Fairway had already opened.”
Coupe said Grand Union is a good example of a large grocer who didn”™t see the future coming and prepare.
“We draw from a complete cross section of the population,” Glickberg said. “We”™re able to deliver a great product for an affordable price.”
Fairway Markets was founded in Manhattan in the 1930s by Glickberg”™s grandfather. In 2007 the company received a $150 million equity investment from its partner and majority owner, Sterling Investment Partners in Westport, spurring the grocer”™s major expansion. Glickberg said the new store”™s layout is nearly identical to the Pelham location, which opened earlier this year.
Fairway in Stamford will have about 460 workers, 250 of which have already been hired through two rounds of job fairs in partnership with Stamford-based CTE Workforce Development. Stamford employees are already training at the Fairway store in Pelham, N.Y. The new building will also house an adjacent Fairway wine and liquor store.
Grocers so close to each other
“Like Stew”™s, Fairway also has a bit of the exciting and theatrical aspects. People are drawn there,” Coupe said. “At the end of the day the food”™s got to be good and the prices have to be right. They are competing in that (Stamford) location with Stew Leonard, a legendary retailer in this part of the country, and also with Whole Foods. It will be interesting to see three world class grocers competing 15 minutes from each other.”
Vince Summa, chief financial officer of Stew Leonard”™s, said the company prepares for new competition by ensuring that all of the stores are doing what is most important to its customers.
“That is the freshest products with unsurpassed quality, many made right before your eyes,” he said. “Friendly people with world-class customer service, great prices, and great values. A fun environment to shop that is always kid friendly. Listening to what our customers want and providing it every day.”
Coupe said the major difference between Stew Leonard”™s and Fairway is the volume. Stew Leonard”™s typically carries about 2,000 stock-keeping units or SKUs, which is a relatively low number according to Coupe. Fairway carries about 80,000, of which Glickberg said is 65 to 70 percent fresh, as opposed to packaged goods.
“Fairway has lots of brands, flavors and choices,” Coupe said. “At Stew”™s you have two, one brand and their private label brand, and that”™s it. They focus primarily on private label stuff and a limited assortment.”
Coupe said the average grocery retailer carries between 40,000 and 45,000 items.
“People are always amazed at that discrepancy,” Coupe said. “Stew”™s is a limited assortment store in essence; they”™re not trying to carry everything. It”™s a very specific shopping experience, and they always knew that would be their challenge, to be so good at what they do that they”™re competitive, and they are.”
Summa said the Stew Leonard”™s limited item offering is one of its greatest strengths.
“It allows us to focus all our resources at being the best at fresh, perishable and prepared foods,” he said. “Our team members have a greater expertise and product knowledge when they can concentrate on 2000 SKUs rather than on 65,000.”
Coupe said one key point for devoted Stew Leonard”™s shoppers is that they can”™t do all of their shopping there, they have to stop at an additional store.
“Stew”™s is very affordably priced,” Coupe said. “Stew”™s has four stores, and have been very measured in terms of how they”™ve grown. Growing is important because if you don”™t grow then you make it impossible for people in your organization to grow, and then they go elsewhere.”
Summa said Stew Leonard”™s is committed to growth and expansion to new locations, however will not sacrifice quality or compromise on its shopping experience to meet an expansion timetable.Â
“We have a more complex business model than any of our competitors, which raises the bar for any new site,” Summa said. He said Stew Leonard”™s growth plans have not been impacted by the entrance of new competitors in a market.
Coupe said Fairway”™s big challenge is to deliver on the experience it promises and being able to measure up to the bar set in Fairfield County by Stew Leonard”™s.
