I've worked at the Pusateri's Yorkville over so decade ago during my younger days, and also at the flagship store during my high school days. I'd say the being close to Eataly is what did them in. They were able to co-exist with Whole Foods for the longest time, and the offerings were slightly different. Albeit WF being more extensive if you wanted every day type groceries. Eataly is more in the wheelhouse of what Pusateri's wanted to be like in an urban location.
Pusateri's has not set a foot right in years...
They've outright closed the Sherway location (and guess whose there now, Eataly)........
They've left the Sak's location at Queen/Yonge to rot, more than 1/2 closed, it was really close to a great idea previously, but needed some tweaks to move more product; but its barely a shell of itself now. Like so many retailer's that fail, its tried to cut its way to success reducing service, product, and innovation, rather than reinvesting in same. They also entered and failed in Oakville a long time ago.
With Yorkville gone, they're down to the flagship, Bayview Village and Little Italy.
Their senior management should walk the plank for all the money flushed down the toilet.
Pusateri's at its best could have done well in Forest Hill with a full service store; or in Leaside, or near Bloor West Village or Bloor/Kingsway.
But they've persisted in going into the wrong locations, and 1/2 assing it as if they owned the market.
The result has been that Eataly in particular is owning them, but at a smaller scale, Summerhill Market is taking it to them as well.
Whole Foods has been a complete laggard in the Ontario market the last decade plus, that's probably been Pusateri's only saving grace.
At their current rate, the flagship will be gone in 5 years.