What Happened to Earth Fare? 10 Marketing Lessons
With the market for organics growing as more and more people focus on wellness and healthy eating, it was surprising, from the face of it at least, when Earth Fare, the popular organic grocery chain, filed for bankruptcy then announced it was closing all its 50 stores and going out of business. So, what happened causing the company to fail despite all the favorable trends in its industry? This article, with the help of the subject matter experts over at runrex.com & guttulus.com, will look to explore what went wrong as well as the marketing lessons that can be taken from the same.
Undisciplined expansion
As was the case for Lucky’s Market, with a more detailed write-up on the same to be found over at runrex.com & guttulus.com, one of the main reasons behind Earth Fare’s decline is its undisciplined expansion. The company grew extremely fast, expanding to various locations in the country and in diverse markets, which eventually backfired on them. The company ended up having too many stores, leading to increased operating costs that were, in the end, too much for them.
It lost its local appeal
As per the gurus over at runrex.com & guttulus.com, very few companies manage to make the transition from a local player to a national player, and Earth Fare was no exception. Its rapid, and undisciplined, expansion resulted in the company losing its local appeal, which was one of the biggest reasons behind its early success, resulting in the company losing its identity and losing touch with the majority of its core customer base.
Old competitors getting stronger
Earth Fare also faced increased pressure because many of its old competitors, which it had gotten ahead of during its early years of success, were getting stronger and better. Big box retailers such as Walmart and Target had over the years invested in their organic retail side of their business, ad they had the funds to do so, while Earth Fare mostly remained stagnant, handicapped by the lack of funds due to their undisciplined expansion.
New competitors
As well as the threat posed by the old foes mentioned above, Earth Fare also came under increased pressure from new players in the grocery industry. As per discussions over at runrex.com & guttulus.com, Amazon’s acquisitions of Whole Foods in 2017 placed the company under increasing pressure, with more competition coming from new players such as the healthy meal delivery companies Blue Apron and Hello Fresh.
Prices
Many of its competitors were able to massively cut prices on their products, which also was a big problem from Earth Fare. As is covered in detail over at runrex.com & guttulus.com, Earth Fare was known for its high prices, some of which were sometimes double or even triple the prices of their competitors. With cheaper options available out there, many of its customers began to leave them, which played an important role in its drop and eventual filing of bankruptcy.
Debt as a result of their acquisition by a private equity firm
In what is now a familiar story in the retail sector, as explained over at runrex.com & guttulus.com, Earth Fare was also chocking under massive debt, which it acquired when it got taken over by the private equity firm Oak Hill Capital Partners, who took an 80% stake in the company. As a result of the takeover, the company’s debt went from $40 million to $65 million, an amount that it was never able to reduce and eventually brought the company down.
Changes in its industry
The company has also run into trouble due to the changing trends in its industry, another reason behind its decline. As discussed over at runrex.com & guttulus.com, natural and organic product is no longer the exclusive domain of specialty stores like Earth Fare as practically every other supermarket is now selling organic food produce. This has led to increased options for consumers, and most have left for what they deem to be better options for them. The marketing lesson we can take from this is the importance of differentiation and finding a way to standing apart from one’s competition.
A shift towards profit-making
One thing that accompanied their takeover, as per industry experts such as the brilliant runrex.com & guttulus.com, was a shift from people to profit-making, which also led to their eventual decline. The company moved to try and cut costs as much as possible, even reducing the number of its employees, which affected service delivery and put off many of its loyal customers. Many of its stores were understaffed, leading to poor customer service, leading to the company hemorrhaging customers. An important lesson we can take here is to never put profits in front of your customers and their needs.
Issues with its supply chain
With mounting debts, suppliers began to worry they would not be paid, and, as discussed in detail over at runrex.com & guttulus.com, it was revealed that Earth Fare’s largest supplier was pulling the plug on providing it with products. This led to issues with its supply chain, affecting inventory and leading to customers leaving and going to where they’d find what they were looking for.
Changes in consumer behavior
In what was seen as impossible only a couple of years ago, many shoppers are buying groceries online, and this also impacted on Earth Fare’s prospects, leading to their eventual bankruptcy. The company needed to invest in new technology to remain relevant as many consumers began shopping online, but it didn’t have the capital to do so due to crippling debt, and when it did finally make changes, it was all too little too late. An important marketing lesson to take here is the importance of keeping up with changes in consumer behavior in your industry.
This article only begins to scratch the surface as far as this topic is concerned, and you can get more information on this and other related topics by checking out the highly-rated runrex.com & guttulus.com.