Summer Conference 2014

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

Bill Sanford
Ed Arditte

Interim Chief Executive Officer

Co-President and Chief Financial Officer

Differentiated Food Shopping Experience

Specialty / fresh /
convenience

Conventional
grocery

Natural /
organic
grocery

Well positioned to leverage the growing trend

towards healthy living
Full selection of fresh, natural and organic

Value proposition attracts broad demographic

Demographic shifts towards younger consumer

Full selection of conventional groceries and

national brand items

Provides seamless transition for cross-over

consumers focused on fresh, high quality and
healthy foods

Specialty, gourmet and indulgent products

Unique Offering and Value Proposition

10%

90%

Conventional
Perishable Mix

~65%

Shopping
Selection

Demographic

Quality

Experiential

Customer Draw

Private Label

~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

Competitive
Pricing

~65%

Narrow

Narrow

Narrow

Broad

Broad

Broad

Destination
& Local

Destination
& Local

Local

Local

Destination
& Local

Local

Local

Distinct and
growing

Distinct and
growing

Distinct and
growing

Small and
growing

Large

Distinct and
growing

Generic

~$600 billion food retail market still dominated by conventional grocers

Channel shift towards fresh, natural and organic segment

Source: Fairway management estimates

Sales & Merchandising

Expanded prepared foods offering

Address the focus on convenience and value

International inspired dishes to cater to the diversity

of a younger demographic
Leverage benefits of centralized production facility

Integrate Fairway branded products into dishes

Private Label

Expand into new categories while increasing

penetration in existing categories
Emphasis on quality

Private Label Product Introductions

Operational Initiatives

Re-engineered new store design to improve workflow and drive labor efficiencies
Integrated new signage system to enhance in-store communications

Focus on highlighting unique merchandising strategy and value proposition

Began working with Google Express to launch online shopping service

Over 12,000 Fairway SKUs available

Same day delivery throughout Manhattan

Highly Attractive Unit Growth Opportunity

Northeast region represents ~90+ stores in a
~$70 billion food retail market
Greater
NYC Metropolitan Area
ON
#1 food retail market
~$30 billion of annual sales

~90+ store
opportunity

VT
NH

MA

NY

Hartfo
Hartford
rd
CT

Bo
Bosto
stonn

RI

Providence
Providence

PA

New
New Yo
York
rk

Philadelphia
Philadelphia
NJ

~50 store
opportunity

Baltimore
Baltimore

WV

Washingto
Washingtonn
MD

VA

DE

Fairway current location

Real Estate Pipeline

Fiscal 2015

Lake Grove, New York (est. summer calendar 2014)

TriBeCa, New York (est. early calendar 2015)

Fiscal 2016

TBD

Hudson Yards, New York (est. late calendar 2015 or early calendar 2016)

Fiscal 2017

Potential to accelerate store growth in fiscal 2017

Leveraging Infrastructure to Drive Profit Growth

Central Services Annual Expenditure (as % of net sales)
1

6.3%

6.1%
5.3%

FY 2011
1.
2.

FY 2012

FY 2013

5.0%

FY 2014

Central services expenses represents G&A expenses less depreciation and amortization pertaining to G&A, management fees and expenses, fees and expenses related to the IPO, financing transaction expenses and other
non-operating expenses.
Our Red Hook, Brooklyn location was temporarily closed beginning October 29, 2012 due to damage sustained in Hurricane Sandy and re-opened March 1,2013. As a result, net sales for the fiscal year ended March
31,2013 reflect a pro forma adjustment of $25.0 million based on the Red Hook locations results during the same 18 week period in the prior fiscal year.

10

Gross Margin Initiatives

Fairway
Branded
Products

Vendor
Initiatives

Central
Production
Facility

~8-9% of net sales with the potential to double penetration

Increased buying power

Greater scale increasing opportunities for key suppliers

Labor Optimization
Capital Efficiencies
Scalability

Consistency of product quality and taste

11

Production Center Update

Anticipated Transition Schedule
1.

2.

Produce cross-dock operations (est. Summer)

Refrigerated cross-dock to preserve coldchain and improve product freshness and

shelf life
Select bakery functions & central kitchen
operations (est. Summer/ Fall)

Automated production lines & state of the art

equipment
3.

Temperature controlled facility

Right: Refrigerated cooling tower .

Below: Loading bays for inbound and
outbound shipping.

Remaining store kitchen operations (est. Fall)

Unit growth to yield labor arbitrage benefits.
Improved product quality & consistency.

12

12

Appendix

13

Non-GAAP Reconciliation
($ in millions)

General & administrative

Depreciation and amortization

IPO related expenses

Management fees

Financing transaction expenses

Professional services

Severance

Non-operating expenses

Equity compensation charge

Pre-opening advertising costs

Foundation funding
Central Services1

1.

FY 2011

FY 2012

FY 2013

FY 2014

$40.0

$44.3

$60.2

$84.1

(4.3)

(5.7)

(1.6)

(2.6)

(0.9)

(1.6)

(1.3)

(0.5)

(0.9)

$30.7

(1.1)

(1.5)

(0.4)

$31.4

(4.5)

(4.3)

(3.0)

(18.1)

(6.2)

(0.3)

(3.5)

(1.1)

(1.0)

(1.2)

(0.1)

(3.2)

$36.4

(0.9)

(2.3)

(3.5)

(0.7)

(11.0)
(2.7)

(1.5)

$38.8

Central Services is a non-GAAP financial measure within the meaning of applicable SEC rules and regulations. The Company believes that Central Services is a useful performance measure and is used to facilitate an
evaluation of infrastructure investments without distortions that may result from general and administrative expenses that do not directly relate to the operations of the business. The Company defines Central Services
as general and administrative expenses less: depreciation and amortization related to general and administrative activities, management fees, financing transaction expenses, pre-opening advertising costs, equity
compensation, foundation funding and non-operating items.

14