Fareway-Iowa

[storewanderer]

Didn't know much about this chain but had heard they ran very basic stores with low cost produce and meat.

Interesting chain. Stores I went to were under 20k square feet. Basically feel like a 1950's grocery store. Small produce area as you enter, meat and dairy on the back wall; meat is full service and part of it is also a lunchmeat deli. Aisles have a tiny split down the middle. Big enough for one cart. Center store pricing is pretty low. Both stores I went to had self checkout. Wasn't impressed with produce (even less impressed with poor quality of what I bought) quality or pricing but meat and center store were great.

They have a full private label program for center store grocery-Fareway brand. Surprising assortment of SKUs for their size. Not a large assortment but very complete. Then for drug/OTC (they have half an aisle) they use packer brands like Good Sense. Looks like a chain that knows its market and runs solid little neighborhood store style stores.

Also they are closed Sunday.

[SO_CAL_RETAIL_SLUT]

Didn't know much about this chain but had heard they ran very basic stores with low cost produce and meat.

Interesting chain. Stores I went to were under 20k square feet. Basically feel like a 1950's grocery store. Small produce area as you enter, meat and dairy on the back wall; meat is full service and part of it is also a lunchmeat deli. Aisles have a tiny split down the middle. Big enough for one cart. Center store pricing is pretty low. Both stores I went to had self checkout. Wasn't impressed with produce (even less impressed with poor quality of what I bought) quality or pricing but meat and center store were great.

They have a full private label program for center store grocery-Fareway brand. Surprising assortment of SKUs for their size. Not a large assortment but very complete. Then for drug/OTC (they have half an aisle) they use packer brands like Good Sense. Looks like a chain that knows its market and runs solid little neighborhood store style stores.



Also they are closed Sunday.

Fareway has very well run stores, good locations and thrive under the nose of blowtorch Hy-Vee. Fareway has stable upper management and is privately-held. The current CEO's is the great-grandson of the founder. His Dad was formerly President of the chain. Fareway is heavily involved in their communities.

For the stores I have visited, the meat department takes up a good chunk of the real estate within their stores - probably by design.

When I visit Iowa, I try to make a stop at one of their specialty meat market-only stores in Des Moines or Ames. Too bad I fly Allegiant to/from Des Moines from Santa Ana, otherwise - I would throw some cuts on dry ice and bring them back to Orange County. I attempted this once on Allegiant - and they don't know their own rules. Wanted to charge me as checked baggage, when dry ice containers using carry-on are permitted.

Fareway is not flashy. They genuinely care for their customer. Will their style of stores work on the coasts? Probably not. Hopefully the family doesn't get the "bug" and sell to a private equity firm. I would rather see the chain go public, but they are fine financially and seem to have access to the credit and equity markets.

Not sure about their expansion into Kansas City. Would rather see them expand into markets of Nebraska, the Dakotas, more southern Minnesota and western Wisconsin locations.

SO_CAL_RETAIL_SLUT

[rwsandiego]

...Will their style of stores work on the coasts? Probably not. ...

That depends on where along the coasts the market would be located. Suburban Orange, San Diego, or Los Angeles counties? Probably no. Ocean Beach, Pacific Beach, Normal Heights, and Downtown in San Diego? Yes, probably. Same for hipster areas of Los Angeles and Noe Valley, The Castro, The Marina, NoPa, and Inner/Outer Sunset in San Francisco. Call it "farm to table butcher shop" with a "curated selection of direct from [the mill, the packer, etc.] convenience items" and you'd have a success.

[storewanderer]

I was very surprised to see a chain of this size with a full private label program. That was very impressive to me.

Meat took most of the back wall in the locations I went to.

Both stores I went to were freestanding buildings. I am guessing they own their real estate.

I can see how they do very well in the shadow of Hy-Vee. A trip to Hy-Vee is not necessarily a quick trip (this does depend on the Hy-Vee, there are still some smaller ones around). This type of store is a great quick shop/fill in type store. You can find what you need very easily and quickly and get in/out fast. Hy-Vee doing things like case ready meat in random stores only further helps a chain like Fareway with a focus on service meat play up its offer as a real competitive differentiator.

Kansas City is an odd market. I think their format may actually work well there. Stores tend to be kind of far apart in Kansas City (like everything else in Kansas City). Hy-Vee has made a couple of really strange/questionable closures in Kansas City also. Smaller neighborhood type stores like this may actually work very well in parts of Kansas City where they do need a supermarket but the density isn't enough for a 55k square foot bakery/deli/pharmacy type operation. I do feel like the various Price Chopper families/AWG will fight this pretty hard since Kansas City is one of the few markets where stores affiliated with AWG are actually really great stores.