It was never my intent for this space to become a forum for political opinion. In fact, this is about the 1,150th column I’ve written since co-founding Best-Met Publishing Co. 47 years ago, and until recently I have purposely shied away from much political commentary.
Things began to change earlier this year with President Trump’s tariff initiatives (more on that later in this column), which to me, were more economic than political, especially their potential ramifications on the grocery business.
The impact of the ever-changing tariff policy along with the significant reduction in SNAP benefits will undoubtedly be the biggest story affecting our business in the near future.
But then came the primary election win by New York City Democratic Socialist Zohran Mamdani. Not only was his victory surprising, his 12-point margin over former New York Governor Andrew Cuomo was equally stunning.
You could argue that Mamdani’s campaign energy and “citizens-first” agenda was the elixir that the city’s voters desired to replace beleaguered current Mayor Eric Adams or that runner-up Cuomo was just a bad candidate at this point of his political career.
Even though the November election will ultimately decide who the mayor of the largest city in the U.S. will be, Mamdani remains the overwhelming favorite.
One of his promises is that his administration would open city-owned supermarkets that will offer lower prices. Here are some specifics about the plan: all told, there would be five supermarkets, one in each borough, operating as non-profit entities. The stores would not have to pay rent or property taxes and would use a centralized distribution system to reduce overhead. These “efficiencies” would result in lower prices. Plans to fund this large project would come from reallocating $60 million from the Food Retail Expansion to Support Health (FRESH) program.
However, scrutiny from multiple news and research organizations has indicated that FRESH funding is for private investment, not for city spending. The plan is already being opposed by several business groups including the Bodega and Small Business Group of New York City and United Bodegas of America. More organizations and trade groups are sure to follow.
Sure, this idea is totally unfair to the thousands of food retailers already operating in New York City who pay exorbitant rents and taxes. Our man John Catsimatidis, who operates 17 Gristedes stores in Manhattan and Brooklyn, has already said that if such a plan were to be implemented, he would either close, move, sell or franchise his stores.
Personally, I don’t think it will ever come to that – not that Mamdani’s idea is so ridiculous – but because the reality of finding suitable locations, developing and training a staff that’s capable of running supermarkets and creating an infrastructure network to operate efficiently enough to offer lower prices seems like a political pipedream from a rookie candidate who has no knowledge of how capital and labor intensive this business really is.
If this is an indication of the level of socialism city residents can expect, Andrew Cuomo’s looking better every day (and that ain’t sayin’ much).
‘Round The Trade
Andre Persaud, president and CEO of retail operations for UNFI, has left the company. Highly touted by chief executive Sandy Douglas, Persaud didn’t last two years at the Providence-based wholesaler/retailer. In his previous job at soon-to-be defunct Rite Aid, Persaud barely reached the three-year employment mark. I listened to the UNFI webcast updating the company’s upcoming Q4 and year-end guidance and I wasn’t impressed. The webcast featured Douglas and CFO Matteo Tarditi. Douglas made the nearly 34-minute broadcast feel like a “rah-rah” session, essentially putting the impact of huge cyberattack hit the company faced last month on the backburner. And unlike Douglas’ summary that distribution was pretty much back to normal, that wasn’t the current message I am still hearing from several Mid-Atlantic retailers supplied by UNFI. Tarditi noted how insurance would cover much of the company’s losses (which could be as high as $425 million), but what about the losses (both real and immeasurable) that UNFI’s customers suffered during the nearly one-month disruption? I found the comments made during the presentation pretty disingenuous.
A few observations from the big Wegmans opening on July 23 in Norwalk, CT. As with every new Wegmans store, the energy and theater-like atmosphere was evident. However, after attending about 30 Wegmans openings in the past 25 years, this debut had a unique buzz – maybe because it was the retailer’s first Connecticut store or the effects of the build-up to the figurative ribbon cutting.
I toured Wegmans’ two primary competitors in the Norwalk market – Stew Leonard’s original store (about four miles away) and the ShopRite owned by the Cingari family (less than a mile away). I hadn’t been to the Stew’s flagship store since before COVID and, frankly, I found the store a bit tired. Let me provide some context. The 103,000 square foot unit remains iconic, and nobody does the “treasure hunt” experience better than Stew. In a battle of heavyweights, Stew should remain confident that no supermarket retailer runs better meat and seafood departments than he does, and by any measure other than Wegmans, the Norwalk store would remain one of the highest volume grocery outlets in the country (and it still may). Although the Wegman and Leonard families have been friends for more than 60 years (and Stew, one of the most outgoing and generous executives in the food industry, came to the Wegmans store on opening day), this will be a battle royale.
As for Cingari’s, it has been planning its Wegman defense for more than two years beginning with a major remodeling in early 2023. When I visited the store, it was very clean, beautifully merchandised with a significant number of fresh items and prepared foods, not only to compete with Wegmans but to serve the upscale community. One of my industry friends, who has lived in Connecticut for more than 30 years, visited all three stores the day after Wegmans opened and opined: “There will be no big winners here. That’s not to say that Stew’s and ShopRite won’t remain profitable, but when you have a clash of titans, everybody’s got to spill some blood. Because of the current sales impact of ShopRite and Stew’s, it’s likely that the new Wegmans volume might ultimately be below its new store norm, but when a 92,000 square foot monolith opens in your town, some of Wegmans sales are going to come from the two highest volume supermarkets in the area. Wegmans will grab sales from other nearby retailers, too – Costco, Walmart, Stop & Shop, Whole Foods (in adjacent Darien) – and from local restaurants. But one advantage that Stew and ShopRite have is customer loyalty. Loyalty as a whole might be waning, but the Leonard and Cingari families have done an exceptional job in serving the community for many years. That alone will make Wegmans’ challenge even more difficult.”
Trader Joe’s is on an unprecedented run of new store construction including eight new units in the Mid-Atlantic and New England. New stores that are slated to open in the next nine months include locations in Shelton, CT; Newton, MA; West Roxbury, MA; Iselin, NJ; Miller Place, NY; Staten Island, NY (its second unit in that borough); Berwyn, PA; and Exton, PA.
Similarly, Target is set to cut the ribbon on five new units in late July and August including stores in Guilford, CT (78,000 square feet); Norwalk, CT (117,000 square feet); Flemington, NJ (74,000 square feet); Astoria, NY (41,000 square feet); and West Goshen, PA (120,000 square feet).
Lidl is also joining the new store mania with openings in Hackensack, NJ; Grand Street. in Manhattan; Bethesda, MD; and Bowie, MD. All four units will open by August 13…Giant Eagle has officially completed the sale of its gas station and c-store division – GetGo – to Canadian c-store giant Alimentation Couche-Tard. The deal, first announced last year, is valued at $1.57 billion and includes about 270 locations in MD, PA, WV, OH and Indiana, As part of the deal, Couche-Tard must divest 35 gas stations (34 existing Circle K locations which the company already operates, and one GetGo).
From the obituary desk, if you were to create a mental image of what a rock star should look like and how he should act, Ozzy Osbourne might be the prototype. Osbourne passed away earlier this month at the age of 76. I have to admit I was never of big fan of Osbourne’s music, both as the leader of heavy metal Black Sabbath or as a solo performer. That said, I found him engaging, charming, hilarious and never dull. His stage performances were legendary, capped by biting the head off of alive bat at a concert in Des Moines, IA in 1982. The lyrics of his biggest hit single “Crazy Train” (1980) pretty much captured Ozzy’s musical mindset – “Crazy, but that’s how it goes; Millions of people living as foes; Maybe it’s not too late to learn how to love and forget how to hate; mental wounds not healing, life’s a bitter shame; I’m going off the rails on a crazy train.” However, Ozzy was much more than a shock performer. He had a strong voice and knew how to assemble great musicians who supported him. Osbourne was twice elected to the Rock & Roll Hall of Fame – first as a member of Black Sabbath in 2006, and last year as a solo performer. As his health began to decline over the last few years, he wrote a premature epitaph for his gravestone: “Ozzy Osbourne, born in 1948. Died, whenever. He bit the head off a bat.”
