When the A&P supermarket chain filed for bankruptcy in 2015, it was hard to miss the irony. A turn-of-the-century pioneer of discount retail pricing, by the 1930s the grocery market chain had become a notoriously powerful company, with 13,000 stores across the country. It used its influence to crush competitors and fight against unionizing workers. In 1950, Time magazine wrote, “A&P sells more goods than any other company in the world” next to General Motors. By the time of its final filing for bankruptcy protection 65 years later — its second in five years — it was under siege from competitors in the suburbs like Whole Foods and Walmart.
The story of a legacy grocery chain falling victim to upstarts offering low, low prices and home delivery remains much the same. This time, it’s the Manhattanite favorite grocery store Fairway that is on its deathbed, filing for bankruptcy for the second time in three years. Long known for its private label brands, varied selection, and fair prices, Fairway is the kind of place that inspires deep loyalty from its customers. Like A&P before it — as well as Winn-Dixie, Bi-Lo, and Lucky’s (which filed for bankruptcy just this week) — Fairway is one of many small-to-mid-sized grocery chains least equipped to compete against the new world of food delivery or constant, Amazon-induced Whole Food price cuts. Private equity, of course, had a significant role too in Fairway’s demise: epic mismanagement (marked by a doomed expansion strategy) and a substantial debt load appear to have left the company with few other options. This is not a unique phenomenon.
On Tuesday morning, I visited Fairway’s flagship store at the corner of Broadway and West 74th Street on Manhattan’s Upper West Side. I wanted to know how Fairway customers were taking the news, and with the possible closure of their local location, how they would adjust to Fairway-less future, and if they might start ordering their groceries on the internet as a potential replacement.
I met Bruce Gilbert in the fruit aisle. He told me that he had been shopping at Fairway for 43 years with varying frequency, and lamented the decline in service over the past decade. He criticized Fairway’s choice to “give up human service for Saran wrap pizzazz.” Gilbert said that he had primarily switched to Whole Foods a few years prior, as he was “tired of getting rotten fruits and vegetables.”
Georgina Kelman told me she’s been shopping at Fairway two to three times a week for 23 years. When she first saw the news of the store’s latest bankruptcy she felt “shock,” even though this wasn’t “a new story.” While she doesn’t order groceries online from Peapod or Instacart, Kelman said that she may start doing so for lack of a better option.
At locations like Fairway’s Upper West Side store, you can quickly spot the shoppers from internet grocery services like Instacart darting among the aisles, their eyes shuffling between their phones and store shelves.
But there are also those for whom ordering online is out of the question. Sina, who works for a family nearby and has shopped at Fairway three times a week for five years, told me that the store’s bankruptcy left her sad.
“With no supermarket, it’s not easy for me to go shopping,” she said. “I like walking around, and I can pick out the things that I want, and see if they’re good.”
Grocery delivery, like restaurant delivery, is a fairly niche market when compared to the traditional way people buy groceries; it accounts for only two percent of the total food and beverage sales volume in the United States, according to the research firm eMarketer. It is expected to grow quickly, however, at an annual rate of around 18 percent over the next few years. At locations like Fairway’s Upper West Side store, you can quickly spot the shoppers from internet grocery services like Instacart darting among the aisles, their eyes shuffling between their phones and store shelves.
The Fairway customers with whom I spoke all felt a devotion to the store and expressed some measure of sadness about its fate. The bankruptcy plan is uncertain, but it’s been suggested that Fairway plans to offload five of its more successful Manhattan stores to a competitor, which may then operate them under a different name. But it’s not the bummed customers or soliloquous critics who will bear the brunt of what happens to Fairway and other supermarkets squeezed out by rising competition. It will be the workers.
When A&P closed in 2015, the company’s management insisted that the cost of its unionized workforce helped speed it to an early grave, saying that labor costs limited its options. Fairway workers at all its 15 locations are covered by a contract negotiated by the United Food and Commercial Workers. Workers at Trader Joe’s, a Fairway competitor, are not. Neither are workers at Fairway’s biggest threat, and probably the biggest threat to the grocery industry as it stands — the Amazon-owned Whole Foods. Since being purchased by Amazon in 2018, Whole Foods has started offering free delivery to Amazon Prime customers — a money-losing touch with which no company in the city can realistically compete. Should Fairway, and other stores like it, go the way of the dodo, their workforces will be replaced one of two ways: by mega-corporations that can afford a real-estate footprint, or by mega-corporations that can lose money on food delivery promotions until the moment the universe experiences heat death. Both options are likely worse than the status quo.
I thought about this as I left Fairway, and about how the store’s workers might meet a fate similar to the people who’ve lost their jobs at other private equity-gutted stores like Payless ShoeSource or Toys ‘R’ Us. I also considered the A&P with which I grew up in suburban New Jersey, and has since been replaced with an Acme that my mom and her friends all think sucks a lot. I further thought about how empty its parking lot has seemed lately.
As I walked up the block I ran into an old family friend, a retired family doctor who moved to the Upper West Side from the Albany area with his wife some years ago. When I asked him where he was headed, he laughed and told me, “Fairway, of course.”
