No Asheville industry has seen stiffer competition than the area’s grocery store market in recent years. The latest indication of the high stakes involved surfaced March 17 when Katuah Market, a locally owned, locally sourced food store and deli, announced it was closing on March 31 after struggling to compete in a saturated market for the past year.
Katuah attributed the struggles to “location, difficult ingress-egress and relentless corporate competition,” in a statement on its Facebook page. Owner John Swann adds, “We opened the store in December 2013 and really had disappointing sales from almost the beginning. … It started with a rough winter, and even when the weather improved, it was challenging to get people to come down here. I underestimated how hard it would be.”
Swann has been disappointed by the failure to build a consistent patronage, which he attributes, in part, to Katuah’s location in Biltmore Station. “We’re not on the beaten path,” says Swann, noting that perception and routine played a big role in keeping consumers away. “People get into habits, and it’s very difficult to break them of those patterns. I had countless people tell me. ‘I love your store, I just don’t get down there that often.’”
Despite efforts to tweak the store model and cut costs, new competition in the past year from national brands like Trader Joe’s and Whole Foods made it nearly impossible for Katuah to compete, he says. “As soon as Whole Foods opened, our sales dropped and we never recovered from that,” states Swann. “Asheville’s the most competitive food market in the United States for its size.”
Even with competitive pricing, Swann says that Katuah was outmatched by the marketing capability of his corporate rivals. “They are very good at it: They take a concept and co-opt it into a marketing theme,” Swann explains. “The grocery world is dominated by big business. They’re too effective at what they do and convincing people that their products are what they claim to be.”
Katuah’s closing strikes another blow to Oakley residents seeking a neighborhood grocery store in their vicinity. Last October, the Bi-Lo on Fairview Road closed as well, citing “underperformance.” Residents are now faced with a longer commute to access groceries and may find more traffic congestion around hot spots like Greenlife on Merrimon Avenue and Whole Foods off South Tunnel Road.
The loss of Katuah also means the loss of a community gathering spot. “I had high hopes for Katuah,” says Marita Renner, a resident of the area. “They had a great outdoor seating area for enjoying their food and socializing,” she says. “On busy days, I often ran into people I knew. It will be missed.” She also notes, “It’s a challenge for a relatively small business to carry so many local, high-quality items.”
“We’re very sorry that Katuah is having to close its doors,” says Steve Hargadon, an organizer of the Small Is Beautiful series, which Katuah provided a meeting space for. “We have really appreciated the staff and management, and will miss the healthy and open environment. They’ve been a class act, and I’m sure it’s been hard for them to throw in the towel.”
For the current 45 employees of Katuah, the writing has been on the wall for several months. “People would come for the big sales, but they didn’t stay,” says Farra Lomasney, who ran Katuah’s supplement department before taking a voluntary sabbatical in December in an effort to save the company money. Lomasney, whose husband also works at Katuah as a butcher, agreed that location was a big issue in the store’s struggles. “We had a good following from Oakley and South Asheville, but a lot of folks from the north just wouldn’t drive this far.”
She defends Swann, who has received a fair amount of criticism through social media as the news unfolded. “Everyone here stands strongly with John,” she says. “It bothers me to see so much negativity leveled at him, when all he tried to do was bring local products to Asheville, based on what people told him they wanted.”
As with most aspects of a locally intertwined economy, the ripple effect of Katuah’s closure extends beyond the immediate players. Swann worries about his ability to pay local suppliers. “We can’t even pay our vendors, and that hurts, because to a large degree, this was to help support local food producers. A lot of them are my friends and colleagues, and it kills me because our debts hurt them too.”
Lomasney says she understands why some vendors might be angry, but she is quick to remind them that “while this definitely hurts [vendors], Katuah and Greenlife [Swann’s former business prior to a controversial buyout by Whole Foods] have helped a number of them build a brand for themselves in the past. That aspect is forgotten at times.”
Some members of the Asheville community have attempted to rally around Katuah; a gofundme account created by one of Katuah’s vendors went up the day after the closing announcement in an attempt to help the market manage its debts. Swann is thankful for any help people are willing to contribute. “If we could raise some money to help pay vendors off, I’d absolutely love it,” he says. “I’ve devoted my personal resources to keeping this afloat, but I’m back to square one.”
Public sympathy notwithstanding, some of Katuah’s staff can’t help but feel that it’s too little, too late. “What else can I say?” asks employee Teresa Rice, as she watched people flock to take advantage of the liquidation sale last Wednesday evening. “There will be 45 employees left here without jobs in two weeks. Now all these people are in here filling up their carts. But where were they before?”
For his part, Swann sees the market’s failure as a wake-up call to what the “Buy Local” movement really means. “I had a concept that I thought would resonate more with the Asheville community, but the reality is that people aren’t particularly into it,” he says.
Lomasney believes that consumer indifference is not intentional but rather the culmination of “small choices. That decision to turn right towards one place instead of left. The decision that you’re too busy to drive the extra distance. It adds up.”
“Supporting local is more than a bumper sticker on your car. It’s more than going on a family outing once a week to the farmers market,” says Swann. “That’s all great, but if you want to support local, then really support it. That means not supporting multibillion-dollar, multinational corporations.
“I now know how the local hardware store feels when Wal-Mart comes to town.”