Fairway and Google tackle same-day delivery

Same-store sales declined again last year at Fairway Market and the company reported a record loss, but a new same-day delivery initiative with Google Express in Manhattan offers potential for omnichannel growth.



Fairway Market is a supermarket operator largely unknown outside of the greater New York area where it operates 14 upscale stores focused on fresh and natural products. Ten of those locations have been opened since 2009 and in April 2013 the company raised $159 million when it sold nearly 15.7 million shares in a public stock offering. The company reported its first full-year as a public company recently and while the numbers weren’t pretty, Fairway is pursuing an intriguing same-day delivery initiative with Google Express that could allow the retailer to leverage its fixed costs to serve a massive and affluent market that lacks convenient access to the type of food shopping options that suburban shoppers take for granted.



“We are also excited to begin working with Google to provide Fairway with omnichannel capabilities through the Google Express shopping service with same-day delivery service throughout Manhattan,” the company’s interim CEO William Sanford said when results for the fourth quarter and 2014 fiscal year were released.



The company recently began working with Google Express to launch an online shopping platform with same-day delivery throughout Manhattan that provides shoppers with access to 12,000 Fairway SKUs across multiple devices. The integration of Google Express allows Fairway to leverage Google's technology and distribution network to increase delivery capacity and expand the Fairway footprint, according to Fairway.



"Fairway's broad offering, which combines fresh, natural and organic products with hard to find specialty items and a full selection of conventional groceries, remains a unique platform in the market,” said Fairway co-president and COO Kevin McDonnell. “Our commitment for delivering quality, selection and value to our customers leaves us well positioned to leverage the growing population of health conscious and value oriented consumers."



Despite favorable industry dynamics, Fairway sales have yet to respond accordingly. During the fourth quarter ended March 30, the company posted a 1.9% same-store sales decline and sales per sq. ft. dipped below $1,000 for the first time in five years. Full year comps declined 0.4%, the fourth consecutive year in which comps declined.



The company reported a fourth quarter net loss of $6.7 million, down from a loss of $8.8 million the prior year. For the full year, the company reported a net loss of $80.3 million compared to a prior year loss of $62.9 million. The losses are part of Fairway’s plan to achieve long-term growth in the New York market. In its annual report Fairway indicated that it expects to incur net losses through its fiscal year ending March 31, 2018.