Exclusive: New hybrid grocer seeking chance to take root in Pittsburgh market

Aug 18, 2015, 2:33pm EDT

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COURTESY FRESH THYME FARMERS MARKET

Fresh Thyme Farmers Market is scouting for locations in the Pittsburgh area.

A young grocery chain with aggressive growth plans and a low-priced approach to organics is eying the Pittsburgh market for expansion.

Fresh Thyme Farmers Market, which recently relocated its headquarters from Phoenix to suburban Chicago, has been scouting the region for locations to open its hybrid farmers market grocery stores, according to sources familiar with the search.

While inquiries to the company were not immediately returned, sources told the Pittsburgh Business Times the grocer has been touring the region for locations this summer and has retained Atlantic Retail Group to represent it in search in Western Pennsylvania. On its website, Atlantic indicates Fresh Thyme is a client seeking locations of 28,500 square feet in western Pennsylvania.

Backed by investment from the owners of the Michigan-based chain Meijer, Fresh Thyme announced in February 2014 it was opening its first store in the Midwest, pledging to open 60 stores and create 5,000 jobs within five years.

A little more than a year later, Fresh Thyme said it is operating or plans to open 28 stores in Illinois, Indiana, Michigan and Ohio, with stores coming to Minnesota and Missouri.

In a different layout from traditional supermarkets, the retailer makes its produce the centerpiece of its stores, pledging to offer a broad array of organic and conventional fruits and vegetables at competitive prices, while offering a mix of complementary items such as bulk foods, meats and seafood as well as a bakery surrounding it.

The Fresh Thyme business model that seeks to customize the organics-focused approach established by Whole Foods for an often new generation of grocery shoppers. It's one followed by other players such as North Carolina-based Fresh Market, which has one store in the Pittsburgh market and expects to soon open another, as well as by North Carolina-based grocer Earth Fare, which has also scouted for locations in the Pittsburgh area.

With Fresh Market taking years to establish a location in western Pennsylvania and Earth Fare yet to do so, Fresh Thyme’s search in western Pennsylvania is no final indication the grocer will establish stores here.

But the company is expanding quickly and has the financial resources to do so, said Neil Stern, a grocery analyst for Chicago-based McMillan Doolittle.

He said the farmers market business model has proven successful on the West Coast, with publicly traded Sprouts Farmers Market, a grocery chain to which Fresh Thyme President and CEO Chris Sherrell sold his Phoenix-based Sunflower Farmers Market in 2012.

Stern sees Fresh Thyme seeking out the Midwest as a new territory for itself outside the western geography of Sprouts.

“They’re trying to pick places in the country where Sprouts is not yet,” said Stern, adding: “Their big draw is to come in with a very, very low price on produce. That’s their traffic draw and they’ll get you to buy stuff around it.”

Based partly on the business model established by Sprouts, he estimated a Fresh Thyme store will typically generate about $250,000 in sales per week. Given the chain's emphasis on lower prices, Stern added that Fresh Thyme will also often seek out secondary locations that often come with lower rents.

He expects a test for Fresh Thyme will be maintaining strong sales volumes, not to mention product offering, during the varying seasons in the Midwest.