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Dean & DeLuca Decline: Why Premium Groceries Bite Dust



Synonymous with luxury and gourmet excess for 42 years, the upscale chain of groceries Dean & DeLuca is struggling. In 2018, he canceled three leases in Manhattan and paved the way for a second store in Washington, DC. In April 2018, all four Charlotte sites were closed abruptly, and shortly afterwards its Maryland and Wichita sites.

The location of the Upper East Side on Madison Avenue in New York ceased operations on June 30 and the St. Helena, California, store closed July 4, both considered flagship stores.

This could herald tough times for other legendary ultra-legendary grocers.

Last May, the New York Post announced that the gourmet grocer not only quietly closed stores, but also did not pay owners and sellers, struggling with suppliers of all sizes.

Founded by Giorgio DeLuca and Joel Dean, the company was acquired by the Thai company Pace Development Corp. in 2014 for 140 million dollars.

In 2018 again, the owner and real estate mogul Sorapoj Techakraisri announced plans to expand the brands of several hundred stores from here two years, dramatically strengthening the company's presence in Asia and the Middle East.

Other similar super premium grocery brands, such as Balducci's, have closed underperforming stores – although Zabar remains strong, despite the lobster salad door. The question is: Is there too much competition for greedy affections?

"There are a lot of things at stake," says David Henkes, senior executive at Technomic, the restaurant industry's analysis firm. "When it comes to groceries, even Whole Foods has slowed down. You look at small (chains) that come from other places, many of them are much more discount grocers. This is where most of the growth has been in the retail trade. "

The proliferation of specialty grocery stores has been a fierce, confusing prediction that grocery sales would be the linchpin of online sales. Amazon bet big. Whole Foods and Trader Joe's have been joined by Aldi, a health food chain, like Newfoundland-based Asheville, Earth Fare, by the rapid development of Sprouts Farmers Market and the more upmarket group. Lucky's, located in Colorado.

(The founder and CEO of Amazon, Jeff Bezos, owns the Washington Post).

Other new family members have chosen ultraluxurian grocery stores, places where you can taste some French cheese and kibitz to see which piece of wild salmon looks perfect.

Market halls and markets such as Los Angeles' Grand Central Market, Atlanta's Ponce City Market and New York's Eataly have been one of the most significant trends in fine dining in recent years, reducing the market share of great casual restaurants and upscale grocery stores.

And Henkes says that for ultra-premium fancy food types, Dean & DeLuca has built its reputation on aged balsamic vinegars and refined pink Himalayan salts – much of it is now available online by pressing a few buttons.

"And for prepared foods, this niche of their business is also a much more competitive space. The areas in which they have been differentiated have become much more trivialized. The competitive landscape has really changed, "says Henkes.

There are only seven Dean & DeLuca stores in the United States. According to the New York Times, hundreds of thousands of dollars are owed to small sellers in New York, while the biggest sellers have ceased credit. The shelves of the remaining stores would be few.


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