RMS Case – Eataly reimagining the grocery store

Group – Shubham borgaokar PGP/04/102

Bhange Akshay balu PGP/04/056
Vibhor jain PGP/04/90
Subham Verma PGP/04/
Vaibhav Sachdeva PGP/04/89
Ashish maheshwari PGP/04/97

Summary –

Within a few years of its operations, the Italian-based supermarket Eataly created a lot of buzz
and excitement among consumers and media. Eataly's initial success was even more impressive
in an industry known for its intense competition and low margins. How did Eataly manage to
grow so quickly, and could it sustain its growth in the future? Part supermarket, part high-end
food court, and part culinary arts school, Eataly was fashioned around the concept of Europe's
open markets and designed to bring together multiple aspects of consumer interaction with food.
Eataly opened its first store in 2007 and within seven years, in a highly competitive, low-margin
industry, expanded to 27 locations around the world. By 2013, Eataly's Italy-based operations
covered more than 600,000 square feet of space and generated revenues of EUR137 million, up
from EUR106 in 2012. Eataly opened a 50,000-square-foot store in New York in 2010 with an
initial investment of USD20 million and a 63,000-square-foot store in Chicago in 2013 with an
investment of USD28 million. Eataly's 2014 revenues for the New York City and Chicago stores
were estimated to be USD75 million and USD55-60 million respectively. With plans to open
additional sites in the United States, Eataly expected US revenues to increase to USD600 million
by 2018. Eataly's success with American consumers was immediate and nearly overwhelming.
For weeks after the opening of the New York store, customers waiting to enter would form lines
around the block. After a blockbuster opening weekend in Chicago, Eataly closed the store on
Monday to give exhausted employees time to restock shelves. However, there was no guarantee
that Eataly could sustain its initial success. Was Eataly a fad, or was it about to change the entire
supermarket industry? Eataly is Italian supermarket which Oscar Farinetti opened in 2007 and
that has immediately become enormously popular around the globe (Gupta, Addis, and Page,
2014). Italian food giant shows positive tendency of growth and its financial data are reliable
enough to make a decision to invest in Eataly.
The shop offers unique concept which makes Eataly stand out among other numerous food
selling location around the world. The company has the concept of European open markets and it
sells products from Italian traditional manufacturers (Gupta, Addis, and Page, 2014). Eataly is
the place where people can experience different aspects of interaction with food; they can taste,
try, and buy products in one place. The network of suppliers of Eataly is small artisan, but high-
quality producers who share the value of good, clean, proper products (Gupta, Addis, and Page,
2014). Thus, Eataly is the promoter of the Slow Food movement, which is about local sourcing,
ecologically sustainable food production, and traditional cuisine (Gupta, Addis, and Page, 2014).
The concept of good, clean, and proper food is extremely popular nowadays as people are tired
of burgers and pizza, and they want to be healthy and slim. The good prove of this is the success
of the alike supermarket in America - Whole Foods which had $13 billion of revenue in 2013
(Gupta, Addis, and Page, 2014). This trend is attractive to me as well and I consider that it will
be popular in nearest future as well and Eataly will prove to be one proud retailer of clean and
good products.
their financial information approves the huge success of the company. Being opened in 2007,
just in 5 years the company reached the revenue of 137 billion euro and 600 000 square feet of
space in its Italy-based operations (Gupta, Addis, and Page, 2014). Started as online shop, Eataly
has gone globally in 2014 and opened operated stores in different places worldwide. Besides 10
locations in Italy, Eataly Company has 17 more stores all over the world: 13 supermarkets in
Japan, 1 in Dubai, 1 in Istanbul, 1 in New York and 1 in Chicago (Gupta, Addis, and Page,
2014). American operations have shown big success as well: in 2010 the company opened
50 000-square-foot store in New York and gained revenue of $75 million in 2014 (Gupta, Addis,
and Page, 2014). An identical 63 000-square-foot store started functioning in Chicago in 2013
and had revenue of $55-60 million in 2014 (Gupta, Addis, and Page, 2014). Eataly plans to have
revenue in the amount of $600 million in its American operations by 2018 (Gupta, Addis, and
Page, 2014).
Yet, experts characterize food retailing industry as low-margin and highly competitive and they
have doubts whether Eataly shop’s success will last for a long time (Gupta, Addis, and Page,
2014). Some people compare fast success of Eataly to that of eatZi retailer that had alike concept
to Eataly’s one. The store was very popular in mid-1990s; however, it failed quickly due to the
vanish of customers’ enthusiasm (Gupta, Addis, and Page, 2014). However, in contrast to eatZi,
Eataly has a big advantage – the company offers online shopping to its customers in three
countries – Italy, the USA, and Japan (Gupta, Addis, and Page, 2014). Recently, grocery
shopping has shifted to online channels due to customers’ need for convenience. I consider
Eataly store will be more like online markets Ocado and Peapod who had revenues in the amount
of $1.1 billion and $700 million in 2012 (Gupta, Addis, and Page, 2014).
Thus, Eataly is Italian new progressive food retailer which offers new concept in grocery
shopping and promotes healthy, clean, and proper food. Customers of the company can buy
things online which is the modern resolution in shopping and is very convenient.