Bloomberg report on groceries

Food & Drug Stores, North America (BI RETFN)

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Key Indicators > Can Cheap Groceries Be Found in Manhattan? >> Exhibit 1 of 9

Cheapest Groceries in Manhattan? Fairway Yes, Whole Foods AlmostAnalyst: Jennifer BartashusSep 3, 2014Fairway Market and Whole Foodshad the best food prices in NewYork City compared with Gristedes,Food Emporium, D'Agostino andonline grocer Fresh Direct, aBloomberg Intelligence pricing studyfound. These retailers competefor business in a $17.5 billiongrocery market, according to FoodTrade News's 2014 Market Study.The basket of 97 items includedtypical products such as produce,snack foods, orange juice, cannedtomatoes and frozen pizza.

Food & Drug Stores TeamBloomberg Intelligence




Fairway Groceries 24% Cheaper Than Gristedes in New York CityAnalyst: Jennifer BartashusSep 3, 2014Fairway has the cheapest groceriesin Manhattan, with a basket of 97items costing $347.10, followedby Whole Foods at $391.39, aBloomberg Intelligence pricingstudy found. Both are substantiallycheaper than New York Citychains D'Agostino ($428.64), FoodEmporium ($429.66) and Gristedes($458.84) for the same items. Thepublicly traded companies havefocused on operational efficienciesand use buying power to passsavings to customers by reducingprices.

Food & Drug Stores Team For interactive exhibit on Bloomberg, run:Bloomberg Intelligence BI RETFN SUPP |1001-A-DATA|12||USD|R917504<GO>




Stingy Manhattan Supermarkets Use Few Sales to Tempt ShoppersAnalyst: Jennifer BartashusSep 3, 2014Fairway Market had more saleitems (23%) in a basket of 97items than other retailers, includingWhole Foods (5%) and Gristedes(4%) in a Bloomberg Intelligencepricing study. The high numberof promotions appeals to Fairwaycustomers searching for deals andhelps the retailer pull shoppers intothe store. Fairway's regular shelfprices were 8% cheaper than WholeFoods, and 11% cheaper includingpromotional sale prices.





Whole Foods Surprises in New York City, Bests Fresh Direct PriceAnalyst: Jennifer BartashusSep 3, 2014Whole Foods has been working toshed its "Whole Paycheck" image byreducing prices across the store andclosing the gap with competitors.Whole Foods was the second-cheapest grocer in Manhattan,besting online retailer FreshDirect and other well establishedchains on a basket of 97 items in apricing study. Whole Foods pricesexcluding promotions were 8% moreexpensive than Fairway Market and2% less than Fresh Direct (includingdelivery charge).





Fairway Price Advantage to Whole Foods Drops on Bigger BasketAnalyst: Jennifer BartashusSep 3, 2014Fairway's price advantage to WholeFoods drops to 5.5% cheaper onregular prices and 6.8% less withsale prices on a basket of more than200 items. A larger basket helpsdilute the impact of sale items togive a better picture of everydayprice competitiveness. Whole Foodstends toward a more everyday low-price model, with fewer items onpromotion, while Fairway reliesmore on a high-low strategy, withmore than double the items on sale.

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Fairway's Widest Price Gap vs. Whole Foods Is in Produce, SnacksAnalyst: Jennifer BartashusSep 3, 2014A study of prices at Whole Foodsand Fairway Market in Manhattanbased on more than 200 itemsfound the largest difference favoringFairway was in produce (13.7%cheaper than Whole Foods), whichmay reflect perceived item quality.Snack foods was another area ofdivergence, with Fairway's prices13.5% cheaper. The gap was lessthan 3% in categories includingrefrigerated, frozen and health andbeauty products.

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Whole Foods, Fairway Manhattan Store Volumes Balance High CostsAnalyst: Jennifer BartashusSep 3, 2014Selling groceries in Manhattancan be a challenge. It is a difficultand expensive market to operatein, requiring retailers to be highlyefficient with their product mix,pricing and labor to attract sufficientvolumes of customers to offset highrents. A broad selection of preparedfoods helps Whole Foods drawlunch and dinner crowds, as wellas full shopping trips from nearbyresidents. Fairway has had to adjustits product mix to maximize salesper square foot.

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Duane Reade Owns 29% of $17.5 Billion NYC Food Market (Correct)Analyst: Jennifer BartashusSep 3, 2014Walgreen's Duane Reade, with166 stores, leads all other retailersthat sell food, health and beautyitems and general merchandisein New York City's five boroughs,owning a 29% share of the $17.5billion market, according to FoodTrade News' 2014 Market Study.Fairway Market (8.6%) and WholeFoods (8.5%) have the next-highestshares; their combined 12 storeshave greater market share than thetotal of 43 Gristedes (4.4%) andD'Agostino (2.1%) stores. (Correctscompany name.)





Walgreens, CVS Expand Fresh Food to Capture Convenience TripsAnalyst: Jennifer BartashusSep 3, 2014Walgreens, CVS and Rite Aidare including more fresh andprepared foods. With many morelocations than grocery chains suchas Whole Foods, Kroger, Roundy'sand Safeway in urban settings,these neighborhood locations canoffer convenient alternatives tocustomers. New "flagship" storesin New York City, Chicago andLos Angeles resemble grocerystores more than drug stores, withprepared foods and hot coffee barsfront and center to draw customers.


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Bloomberg report on groceries