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St. Petersburg store is 100th for growing Fresh Market chain

Some grocery stores are about low prices. Others tout broad selection and one-stop shopping. Fresh Market is about romancing the food and selling what's for dinner — one meal at a time for tonight or this weekend.

"We have the look and feel of a European market or the Hollywood Farmers Market in California," said Craig Carlock, chief executive of the Greensboro, N.C., chain that parlayed a formula of premium perishables — produce, meats, seafood, deli and bakery — into a chain that Wednesday opens its 100th store.

Located at 2900 Fourth St. N in St. Petersburg, it's the third Fresh Market in the Tampa Bay market. But while the food is the same, this fast-growing retailer is trying some new tweaks. The classical music remains, but the low, dark ceiling has given way to a white one, cathedral style, that offers natural light. A much bigger porch out front will show seasonal pumpkins, Christmas trees and potted plants. Aisles that angle off from the big, center stage deli are wider, leading shoppers to each open-kitchen service department.

Fresh Market is one of several food chains behind a growing industry shift to smaller stores that are faster to shop. Some like Aldi use a limited selection to keep prices down. Others like Trader Joe's and Tesco's Fresh & Easy, now spreading to the East Coast, use a constantly changing assortment of eclectic, easy-to-make meals to attract the time-pressed. In contrast, Fresh Market is all about the perishables — and their tantalizing high profit margin — which make up 67 percent of sales.

It's a slimmed-down niche player that favors high-income neighborhoods.

In fact, the 22,000-square-foot store — a third the size of a typical Publix — is basically the bulk and perishables departments minus aisle after aisle of dry groceries, cleaning supplies, freezer cases and pet foods that hog the middle of other supermarkets.

It's the creation of Ray Berry, a one-time 7-Eleven executive, and his wife, Beverly, who in 1982 challenged then-standard supermarket practice of pre-packing the produce to unload the overripe and keep unwashed patrons from pawing the pomegranates.

The Berrys stacked and shined theirs. They ordered clerks to cull and toss the bruised and blemished all day. They freed shoppers to grab and squeeze.

"Our name is fresh," said store manager Leo Suarez. "So we're more stringent about not letting food look tired."

Often mislabeled a clone of Whole Foods, which built its reputation as a nutritionally-correct natural/healthy foods chain, Fresh Market evolved into more of a gourmet market after the Berrys whittled out most food supplements, vitamins and organics early on.

They price competitively, but stock only premium specifications. Sometimes that makes them first with such tasty items as honey crisp apples. Often it just means the largest Granny Smith.

Fresh Market parlayed shoppers newfound preference for fresh over processed foods into a growth story that continued through the recession. In 2009, sales rose 8 percent to $862 million, net income soared 43 percent and new store growth held on at 15 percent a year.

But Fresh Market was not immune to a weak economy. Sales in stores open more than year — a measure of a chain's grasp on current customers — slumped 4.8 percent. The company trimmed its staff, pared new store growth and called off a private sale. Instead, the Berrys plan a public offering to sell a minority stake, which will hinge on investors' perceptions that the worst is over. Indeed, in stores open more than a year, Fresh Market sales rose 4 percent the first half of 2010.

"They did okay, but not great in the recession," said Burt Flickinger, president of Strategic Resources Group, a retail consultant. "But I see significant food price inflation the next two years challenging them."

Mark Albright can be reached at [email protected] or (727) 893-8252.

Fast facts

The Fresh Market Inc.

Origins: Founded in 1982 in Greensboro, N.C., as a speedy gourmet market anchored by premium perishables in a European farmers market setting.

Size: 100 stores in 19 states as far north as Wisconsin.

Top sellers: Prepared food-to-go, premium produce, a variety of nut breads, 14 types of pies, store brand jams, aged USDA choice/premium steaks, bulk food, including candy, nuts, grains and house brand coffee.

Store brands: 11 percent of sales (half as much as the average supermarket), but growing with recent additions of premium ice cream and yogurt.

Favorable demographics: Aging baby boomers in retirement will be big fresh food buyers. Fresh Market has 24 stores in Florida, more than any other state.

Source: SEC filings

St. Petersburg store is 100th for growing Fresh Market chain 10/11/10 [Last modified: Tuesday, October 12, 2010 3:07pm]
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