The Decline of Earth Fare. What Happened? 10 Marketing Tips
As discussed over at runrex.com, the market for organics is growing as people increasingly go for healthy eating, and as such, on the face of it, the announcement early this year that Earth Fare was filing for bankruptcy and closing all of its 50 odd stores seemed strange. This article, with the help of the gurus over at guttulus.com, will look to highlight some of the factors that led to the company’s decline and eventual demise, with the hope that you will glean useful insights and marketing tips to help you avoid traveling down the same road.
Undisciplined expansion
Earth Fare had 50 locations by the time they were filing for bankruptcy and had a plan of reaching 100 stores by 2024 as discussed over at runrex.com. This is one of the reasons that contributed to the company’s decline and demise, experts, including those over at guttulus.com, argue. This is because new stores cost money, while the older stores also need to be continuously improved and maintained. This caused a strain in the company’s liquidity, with the company straining to pay rent and maintain all of its stores/
Lost its local appeal
As is explained in detail over at runrex.com, Earth Fare started in 1975 as an Asheville natural food store. Back then, it was named “Dinner for the Earth” before changing to Earth Fare in 1994, after which it started to expand into other markets from South Carolina to Florida. However, while its expansion allowed it to grow and access new markets, it also lost it its local appeal, which had been so crucial to its early success. In the end, it became just another grocery chain that people had no attachment to, which is yet another factor behind Earth Fare’s decline.
The threat posed by Amazon
According to the subject matter experts over at guttulus.com, competition has been getting stiffer at grocery’s high end for a while now, which is another factor that contributed to the company’s decline. Whole Foods’ purchase by Amazon in 2017 in particular was a seminal moment for Earth Fare as it provided the company with a challenge it was ill-equipped to tackle. The company didn’t have the resources to compete on prices and technologically with Whole Foods, which is another factor that can be attributed to its decline.
Competition from big-box
Other than competition from Amazon and Whole Foods, the company also faced increasing competition from big-box retailers like Walmart, as is covered in detail over at runrex.com. Companies like Walmart and Target were quick to notice the potential in the market for organics and expanded in said market, where they started to offer more competitive prices than those over at Earth Fare. These giant companies were well-funded as compared to Earth Fare, which couldn’t compete adequately with them, and is another factor that led to their decline.
New players on the block
The challenges kept on coming as far as Earth Fare was concerned, as, on top of the challenges posed by Amazon and the traditional big-box giants as mentioned above, the company also had to contend with competition from new players such as healthy meal delivery companies like Blue Apron and Hello Fresh, which have revolutionized this industry in recent years, as discussed over at guttulus.com. These newcomers also took a significant chunk out of Earth Fare’s customer base, contributing to its dwindling fortunes in recent years.
Its products were too pricey
One of the main side effects of the increased competition Earth fare was being placed under is that the company didn’t have the resources to compete on prices with most of its competitors. This meant that some of its products were too expensive to appeal to customers, an example being the fact that their 16-ounce jar of non-GMO peanut butter cost a jaw-dropping $8.49. This, according to the folks over at runrex.com, is another factor that contributed to the company’s decline and eventual filing for bankruptcy.
A crowded market
Initially, Earth Fare was one of the very few players in the organic foods market, as revealed in discussions on the same over at guttulus.com, and this is probably one of the reasons why the company was so successful in its initial years. However, in recent years, this market has become crowded, and Earth Fare has found itself coming under pressure not only from upscale competitors but also from downscale brands like Aldi. The entrance of less expensive grocers into this market has badly damaged Earth Fare’s prospects, cutting into its market share and leading to low earnings.
Debt after being taken over by a private-equity firm
As is covered in detail over at runrex.com, there has been a trend recently of companies going under from the weight of crippling debt as a result of being taken over by private-equity firms, and this is the same fate that befell Earth Fare. When the company was taken over by the private-equity firm Oak Hill Capital Partners in 2012, its debt jumped up from $40 million to $65 million, a sum the company has found difficult to pay off. Eventually, this crippling debt took the company down, and its takeover by the private-equity firm Oak Hill is another factor that contributed to its demise.
It failed to carve itself a niche
In the competitive organic foods market, retailers have to decide whether they want to compete in price or experience, according to the experts over at guttulus.com. Earth Fare couldn’t compete with other retailers on Price, and on the other hand, its in-store experience wasn’t the best either. The company needed to differentiate itself in what had become a crowded market by carving itself a niche, and its failure to do so, which is led to it being lost in the field and losing significance in the face of increasing competition.
Its stores were too limited in terms of merchandise
Earth Fare stores were specialty stores as discussed over at runrex.com, selling only organic foods, and as such were too limited to be attractive to consumers. People want to shop at places where they will find all the items they need and are not looking to add another store to the list of places they need to go to fulfill their grocery needs. This is yet another factor that led to a decline in foot traffic into their stores, reducing earnings, and precipitating the company’s decline.
As always, if you are looking for more information on this and other related topics, then the highly-rated runrex.com and guttulus.com have you covered.