ICR XChange

January 2015

Forward Looking Statements/ Safe Harbor

Except for historical information contained herein, the statements in this release are forward-looking and made
pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking
statements involve known and unknown risks and uncertainties and other factors that may cause Fairway's
actual results in current or future periods to differ materially from forecasted results. Food retail is a large and
highly competitive industry, and Fairways business involves many risks and uncertainties, including, but not
limited to: our ability to open new stores on a timely basis or at all; our ability to achieve sustained sales and
profitable operating margins at new stores; the availability of financing to pursue our new store openings on
satisfactory terms or at all; our ability to compete effectively with other retailers; our ability to maintain price
competitiveness; our ability to achieve the anticipated benefits of our centralized production facility; the
geographic concentration of our stores; our ability to maintain or improve our operating margins; our history of
net losses; ordering errors or product supply disruptions in the delivery of perishable products; restrictions on
our use of the Fairway name other than on the East Coast and in California and certain parts of Michigan and
Ohio; our ability to retain and attract senior management, key employees and qualified store-level employees;
rising costs of providing employee benefits, including increased healthcare costs and pension contributions due
to unfunded pension liabilities; our ability to satisfy our ongoing capital needs and unanticipated cash
requirements; and other risk factors detailed in our filings with the Securities and Exchange Commission
(SEC), and available at the SEC's website at www.sec.gov. You are urged to consider these factors carefully in
evaluating the forward-looking statements herein and are cautioned not to place undue reliance on such
forward-looking statements, which are qualified in their entirety by this cautionary statement. The forwardlooking statements made herein speak only as of the date of this presentation and the company undertakes no
obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.
Actual results could differ materially from anticipated results. More detailed information about these and other factors is set forth on Fairways Annual
Report on Form 10-K for the fiscal year ended March 30, 2014 and in subsequent filings with the Securities and Exchange Commission.

Speakers

Jack Murphy

Chief Executive Officer

Dorothy Carlow

Ed Arditte

Chief Merchandising Officer

Co-President and Chief Financial Officer

Nico Gutierrez

Director of Finance and Investor Relations

Key Facts Slides

General

Category Allocation

Founded: 1933

7%

Headquarters: Harlem, New York City

Perishable

Number of Stores: With 15 sites today, Fairway is the

leading Grocery Store concept in the New York Metro Area
CEO: Jack Murphy appointed in September 2014; brings
with him over 30 years of proven experience and industry
leadership

NonPerishale

29%
64%

Specialty

CMO: Dorothy Carlow joined FWM in November 2014, track

record of developing innovative merchandising processes
COO: Kevin McDonnell joined FWM in 2007; Kevin is a
seasoned retail operator with a history of achieving
measurable results
CFO: Ed Arditte has served as CFO since December 2012

Key Metrics

LTM Sales by Department

Total gross sqft: 895K

Total selling sqft: 526K
LTM Sales: $798.2mm

Produce

19%

Organics

30%

Grocery

LTM Gross margin: 31.5%

Deli

LTM Adjusted EBITDA: $43.3mm

14%

LTM Adjusted EBITDA margin: 5.4%

Specialty

7%
9%
Metrics based on LTM period ended September 28, 2014

Meat

11%
10%

Other
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Assessment of the Business

Strong brand equity

Industry leading sales metrics

Passionate and experienced team members

Ability to optimize current footprint

Unit growth opportunity in immediate market

Brand Positioning Statement

Big, bold, and a little bit rebellious, Fairway Market is an
exuberant experience that celebrates eating and eating big.
Delivering the best fresh and handmade foods, Fairway also
offers more. Indulgent, delicious and scandalously good,
taste first is and always has been Fairways charge. For every
man, woman and child, Fairway is a food treasure hunt at every
turn. Notoriously New York, we LIVE TO EAT BIG at Fairway.

Fairway the Innovator the Best of All

The only SpecialtyPLUS market. Fairway is and

always has been a unique like no other market food
seller.

It was the first food market that was successful at

combining the specialty shop with the conventional
stop.

The greater purpose of Fairway is clear: to deliver the

best of both conventional and specialty food in one
shopping experience. Fairway has it all BIG FOOD,
BIG SAVINGS and BOTH specialty and everyday items
all in one exciting food celebration.

Fairway is the worlds leading grocery store for

specialty foods and best in class artisanal and
destination items.

Fairway the hybrid Market

Specialty / fresh /
convenience

Conventional /
Discount

Natural /
organic

Fairway: the one stop and full shop best of both

worlds. Consumer trend moving in this direction
and Fairway positioned to capitalize
Fairway is one store in trade area truly
delivering on this dual experience
Tremendous history and culture of Fairway as a
food retail innovator in SpecialtyPLUS space
Fairway invented the space!

Hybrid Format Aligned with Consumer Trends

Conventional
Perishable Mix

~65%

~65%

~65%

~20%

~45%

~50%

~35%

Broad
70,000 SKUs

Narrow
21,000 SKUs

Narrow
9,500 SKUs

Narrow
18,000 SKUs

Narrow
3,500 SKUs

Narrow
16,500 SKUs

Moderate
50,000 SKUs

Broad

Narrow

Narrow

Narrow

Broad

Broad

Broad

Competitive
Pricing

Quality

Experiential

Customer Draw

Destination
& Local

Destination
& Local

Local

Local

Destination
& Local

Local

Local

Private Label

Distinct and
growing

Distinct and
growing

Distinct and
growing

Small and
growing

Large

Distinct and
growing

Generic

Shopping
Selection
Demographic

Source: Fairway management estimates

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Immediate charge
Clear direction and focus
for the next 120 days

Phase 1: Optimize the Current Footprint

Focus

Opportunities
Same store sales

Customer tractions, UPT and mix

shift

Price optimization and productivity

of promotions

3 Step Approach: Right price, EDLP

& TPR

Supply chain management

3PL and vendor management

Shrink

Improve ordering tools and process

discipline

Labor

Optimize scheduling and leverage

labor dollar
ENHANCED PROFITABILITY

Expansion Potential in Existing Market

The Greater NYC Metro area represents a potential 30 store opportunity in a
~$30 billion food retail market
Greater NYC Metropolitan Area

#1 food retail market

~$30 billion of annual sales

Food Stores

Food & Wine

Central Production

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Earn the Right to Grow

Phase 1: Recovery, Collective Focus, Planning

WHAT WE DID

1. Recover

WHERE WE ARE NOW

2. Collective Focus

Nov 14 Feb 15

Phase 2: Growth
WHAT ARE WE WORKING TOWARD

3. Re-energize the
brand

Mar 15 Dec 15

4 . Driving growth and profitability

Jan 16

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Phase 2: Expansion Strategy

Focus on growth opportunity in Tri-State area

Enhanced focus on revised new store model

2016

FWM market share <3%

Smaller footprint

Potential for 15-20 new locations

Reduced capital cost per sqft

Strong brand equity

Reduced pre-opening expenses

Ability to leverage current infrastructure and

Accelerated maturity ramp

management

3 Phase Site Selection Process

Analysis

Comments

Demographics

Consumer
Psychology

Accessibility of location
Bridges, tunnels, highway exits, etc.
Parking spaces
Co-tenancy

Customer
Segmentation

Leverage existing 3rd party resources

Identify Fairways brand critical lifestyle segments
Target trade areas with disproportionate concentration of
brand critical segments

Daytime/ Nighttime population densities

Income thresholds
Education
Age

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Current Business Update

Fiscal 3rd quarter results to be released in early February 2015

Business performance improved in a number of key areas

3rd Quarter cash of approximately $35 million

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Working Together to Build ONE FAIRWAY

Our Values
Be Courageous
Commit with heart and mind. Move toward better. Change course when necessary.
Be Positive
Have fun. Create great opportunities and expect great things to happen.
Own It
Act with urgency. Take responsibility.
Serve Others
Make someones day. Give credit. Reward people for taking risks and producing better outcomes.
Lead
Be real. Inspire creativity. Innovate to create a better future.

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ICR XChange
January 2015

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