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Why are so many organic grocers landing in bankruptcy court?

February 10, 2020

Reckless expansion and heightened competition for natural and organic foods were factors behind the recent bankruptcies of Fairway, Earth Fare and Lucky’s Market, but each chain faced unique challenges.

Fairway, a New York institution known for its wide selection of cheeses and cheap produce, filed for Chapter 11 on Jan. 23. The bankruptcy was attributed to debt taken on from a leveraged buyout (LBO) in 2007, an ensuing aggressive and unsuccessful expansion into the suburbs, and newer competition ranging from Costco to Whole Foods. The chain reached a deal to sell to five of its locations to Village Super Market, which operates stores under the ShopRite and Gourmet Garage banners. Fairway is seeking buyers for the remaining nine locations.

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