Could This Be the End of Fairway Markets, a New York Institution?

But this week, a new report said the company’s demise was imminent, stunning many New Yorkers who considered the store a battle-tested survivor of the unforgiving retail landscape.

The company denied the details of that report on Wednesday.

“Despite reports, Fairway Market has no intention to file for chapter 7 or liquidate all of its stores,” Rica Hermosura, a spokeswoman for the company, said in a statement. “Such statements are categorically untrue and disappointing.”

Fairway, she added, would soon announce a transaction “that will provide for the ongoing operation of its stores.” In the meantime, all 14 locations remain open.

Two people with knowledge of the company’s deliberations said the company was contemplating bankruptcy plans. The details of the plans, including whether some stores will stay open but under a new owner, have not yet been worked out, according to the two people.

Opening as a fruit and vegetable stand in 1933, Fairway became a destination on the Upper West Side of Manhattan, where fiercely loyal shoppers endured cramped aisles and the occasional pushing for access to its selection of artisanal breads, French cheeses and fresh seafood.

But the company’s decision to expand beyond Manhattan and open stores in the suburbs hobbled it financially and it has struggled to find its footing. Fairway has also been hurt by the arrival of Whole Foods and Trader Joe’s in New York City and the growth of competition from online delivery services like Amazon and Fresh Direct, among others.

The news of Fairway’s potential demise set off lamentations on social media and on the streets of New York, though there were some who said the chain had lost its luster.

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“I dislike Fairway because ever since they sold it to a corporation, the quality of the fruits and vegetables is terrible,” said Eleanor Mason, who lives on the Upper West Side and described herself as a former Fairway regular.

On Wednesday, she went to the Upper West Side Fairway branch for just a few items. “I buy very little and I use it immediately,” she said. “The prices have gone up considerably and the quality has gone down considerably.”

But another Fairway customer, Merle Gonchar, who said she has been shopping at Fairway since moving to the Upper West Side in 1997, called the store a neighborhood anchor.

“We are really low on supermarkets,” said Gonchar, her cart filled with kosher meat, coffee and split pea soup. “Yes, there is online ordering, but a lot of people prefer to come to the supermarket.”

And Boikar Treore, a manager in the seafood department, said he could not believe that the store could close. “You see the mood over here?” he said “No one is stressed. We are like we are regularly.”

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About 2,300 Fairway workers in the New York area are represented by UFCW Local 1500, according to Aly Waddy, the secretary-treasurer of the union.

The Fairway in Harlem is one of the largest supermarkets in the neighborhood. Iris López, a retired nurse who lives in Washington Heights, said she goes to that store about twice a month.

“The produce is fresh. The people are knowledgeable. It’s clean,” López, 75, said while pointing to the loaf of challah bread and the ball of mozzarella cheese in her cart. “If they ever close this store, I think I would cry.”

For years Fairway seemed to occupy an emotional space in New York’s psyche. After Hurricane Sandy destroyed parts of the city in late 2012, the reopening of the Fairway store in Red Hook four months later was greeted as a momentous triumph. Local residents, nearby business owners and lawmakers turned out for the event.

At the time, Howard Glickberg, the store’s vice chairman for development, said the company “made a decision when this happened that when we came back, it wouldn’t just be about Fairway. It would be about Red Hook.”

The challenges facing Fairway are part of a nationwide shakeout in the supermarket industry.

Amazon’s $13 billion purchase of Whole Foods has threatened to upend the grocery business. Unions representing grocery workers have seen a decline in membership. And many struggling groceries are owned by private equity companies that have loaded the stores with debt.

Over the last five years, a series of major chains across the country have filed for bankruptcy, including A&P, Winn-Dixie, Bi-Lo and Marsh Supermarkets, as well as Fairway.

“It’s not a level playing field,” Abel Porter, chief executive of Fairway said in a 2018 interview. “Competing against Amazon is like competing against the government or a military commissary.”

Still, Burt Flickinger, a consultant for retail chains, said that Fairway’s stores in New York City, excluding its location in Red Hook, Brooklyn, are among the leading grocery stores in the city. They have a loyal following and an outsize influence in the market, with many consumers going out of their way to shop there, he said.

“It has the highest sales per square foot of any mainline food retailer chain in New York City,” said Flickinger, whose company, Strategic Resource Group, has analyzed the grocery store market. “The core stores are very viable and very cash-flow positive.”

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Fairway’s larger stores in Manhattan, such as its locations on Broadway and in Harlem, each drive annual sales that would rival the combined revenue of a dozen smaller grocery stores, Flickinger said.

The main problems for Fairway, he said, were its two suburban locations in New Jersey and its branch in Stamford, Connecticut. They have lagging sales and expensive leases, he said, as does Fairway’s store in Red Hook, which is in a hard-to-get location far from public transportation, and pays about $1.5 million a year in rent.

Flickinger said he believes that Fairway could emerge as a successful chain through a Chapter 11 bankruptcy that addresses its suburban locations. “Parts are doing extremely well and should be saved,” he said.

This article originally appeared in The New York Times .