Trader Joe’s Moves in on Fairway’s Turf

Discussion
Nov 11, 2010
Tom Ryan

By Tom Ryan

Many gourmet grocers feel pressure when a Trader Joe’s opens nearby
and Fairway Market, a Manhattan institution on the Upper West Side, is no exception.

Since
Trader Joe’s opened two blocks south at 72nd and Broadway on September 20,
sales at Fairway have gone south.

"It had an impact," Howard Glickberg, chief executive of the seven-unit,
family-run chain, told Crain’s NY. "We saw a little downturn in
a few departments, but we aren’t changing anything about the way we operate."

Founded
in 1940 by his grandfather, the store is characterized by floor-to-ceiling
produce displays. While earning a reputation for reasonable prices, its exotic
assortment has also made it a favorite with foodies. A store that opened earlier
this month in Stamford, CT features more than 600 cheeses, 90 coffees roasted
in-house, more than 70 types of olives, more than 100 varieties of olive oils,
and an in-house kosher bakery, according to The Daily Stamford. The
spice aisle has almost 250 spices under the Fairway brand name.

A Yelp review
gives the 74th St. location four stars out of five. The main complaints were
the crowds and narrow aisles.

A price comparison by DNAinfo.com found
that a bag of grocery staples costs $51.08 at Trader Joe’s 72nd. St. store
versus $58.47 at Fairway’s 74th St. store. A similar package at the Whole Foods’
store at Columbus Avenue and West 97th St., which opened last year, was priced
at $68.89. Other specialty grocers in the area are Zabar’s and Citerella.

Reviews
of the opening indicated that shoppers would still have to go to Fairway for
its wider assortments and Fairway was given higher ratings for fresh produce
and perishable products.

In a review on Yelp, Amy. L. said Trader’s Joe’s "can
give Fairway a run for the money," especially on frozen and prepackaged
meals. But prices on items like cheese, meat and produce are close and the
quality and selection at Fairway is better.

"Yes, this place is crowded," she wrote. "Yes, the aisles
are tiny and clog up with oblivious entitled Upper West Siders on their cellphones.
Yes, the checkout lines are long. Yes, the harmless-looking old ladies will
ram you with their shopping carts with no provocation. But without Fairway, there’s
no way I could afford to eat as well as I eat."

But in a Yelp review
of the new Trader Joe’s store, Christine M. raved about being able find to
her Trader Joe’s "favorites" along with
an organized layout, friendly employees and speedy checkout. She concluded, "I
don’t think I’ll step foot in Fairway ever again!"

Discussion Questions: What type of competitive pressures does Trader Joe’s
place on local gourmet retailers? What changes may Fairway and others
have to explore when a Trader Joe’s opens nearby?

Please practice The RetailWire Golden Rule when submitting your comments.

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11 Comments on "Trader Joe’s Moves in on Fairway’s Turf"


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Dr. Stephen Needel
Guest
10 years 5 months ago

Price, quality, and service are hallmarks of Trader Joe’s. Selection is not, although it’s not bad. If Fairway wants to compete, it either needs to improve on price, quality, and service or push its selection advantage (which may make it more of a gourmet specialty store than it would like to be).

David Livingston
Guest
10 years 5 months ago

Trader Joe’s is very unique so its unlikely that a small independent will be able to replicate anything TJ’s does. Trader Joe’s opens so the dollars have to come from someplace. It’s only logical that sales will go down a bit at nearby competitors. Fairway just needs to keep doing what they have been doing in the past and continue to be superior in perishables. Perhaps they shouldn’t waste time worrying about getting dollars back from Trader Joe’s but rather focus on weaker competitors in the area.

Carol Spieckerman
Guest
10 years 5 months ago

Although Trade Joe’s offers items that you wouldn’t find in the average Walmart, Whole Foods it ain’t. Trader Joe’s is not what I would call a gourmet grocer; it is a private brand retailer that (strategically) further blurs comparison by offering a unique (but not comprehensive) selection of food items in a highly navigable format. That’s a killer combination but no match for a Manhattan specialty gourmet store, particularly one that enjoys a loyal following.

Rick Moss
Guest
10 years 5 months ago
Full disclosure here: I’m a Trader Joe’s-to-Fairway convert. A Fairway opened near us and we haven’t looked back at TJ’s since. I honestly don’t think Fairway has a thing to worry about. Stephen recommends stressing price, quality, service and selection. Of those, price is the only thing TJ’s competes on, as I see it. Fairway is an amazing grocer. The stores have — if not the largest — the most full-rounded selection of items that I know of, from gourmet and international to organic/natural, store brands and national brands. There are spectacularly tantalizing departments. (Check out this bulk coffee display on our Facebook page…) Among other crowd pleasers in the store is an olive oil tasting station with perhaps 30 varieties of Fairway’s own from regions all over the globe. The cheese, fish, fresh bakery and produce are on par with Wegmans, in my book, although not merchandised as elegantly…more of a New York street feel. There are probably more differences to point out in the styles between TJ’s and Fairway than similarities, but they… Read more »
Gene Hoffman
Guest
Gene Hoffman
10 years 5 months ago

Give unto Trader Joe’s that which is Trader Joe’s and give unto Fairway that which is Fairway. In other words these are two different retail dudes with different appeals and each should focus on appealing to their kind of customers.

So I find myself in boat with Rick Moss.

Bill Emerson
Guest
Bill Emerson
10 years 5 months ago

I’m with Rick on this. Fairway is an unbelievable experience. While TJ’s may take away some frozen prepared-meals business, they haven’t got a chance in terms of green grocer, butcher, or breadth of selection. Fairway has breezed through the intrusion of Whole Foods without much pain. Given the relatively small size and selection of TJ’s, I can’t imaging this will be a major hit for Fairway.

David Biernbaum
Guest
10 years 5 months ago

There will be some moderate overlap but Trader Joe’s for the most part does not replace the market for Fairway.

Geoffrey Igharo
Guest
Geoffrey Igharo
10 years 5 months ago
It would be a mistake for Fairway to drag itself into some sort of price competition with Trader Joe’s. As the article itself suggests, there isn’t much difference between the prices already. At the end of the day, Trader Joe’s is Aldi–and really no one is going to beat Aldi in price war on private label frozen goods or ziplock bags or whatever. So they are going to get the few customers who prioritize that sort of product. Fairway offers something of value, which they can and should make sure they get paid for. You can’t chase every customer at all costs. The peripheral items that Trader Joe’s is cheaper on are a secondary convenience that Fairway offers to give customers a one-stop-shop–they are not the main draw. Bad idea to slash prices on those sorts of things just to chase a few marginal customers. So Fairway needs to just focus on what it does and improve at it. Sharpen the selection, continue to find killer products and continue to improve their highly personal customer… Read more »
Craig Sundstrom
Guest
10 years 5 months ago

“Yes, the aisles are tiny and clog up with oblivious, entitled Upper West Siders on their cellphones.”

Hmmm…I’m just hoping they perform a public service and mark all of their doors “No Exit.”

Mark Johnson
Guest
Mark Johnson
10 years 5 months ago

Trader Joe’s has one of the most loyal/engaged client bases in existence.

Ed Rosenbaum
Guest
10 years 5 months ago

I don’t recall McDonald’s closing or running scared when Burger King or Wendy’s came in and poached in the same area. And I don’t think Fairway has any concern about Trader Joe’s as long as they keep doing what they have done successfully to gain the excellent reputation they enjoy. TJ does not have that wide a variety to make Fairway run scared. Yes, price might be an issue. But not in most of the areas where they compete because price is not an issue to many customers living in the area.

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