When you’ve been around as long as I have (since 1973) – I’ve been reporting about the grocery industry for that many years – logic figures that I’ve been in tens of thousands of retail food stores in my 53 years in the biz.
If I had to choose the worst run company I’ve witnessed during that span, the simple answer would be Fresh & Easy Neighborhood Markets, Tesco’s gift to the U.S. when that British-owned chain decided to expand across the pond.
During its nearly six-year sleepwalk in this country, the then well-respected English merchant managed to open more than 200 stores in California, Arizona and Nevada and lose an estimated $4 billion from November 2007 to April 2013. If you’re wondering whether Tesco’s problems were mainly related to its competition or specific store locations, you’d be mostly wrong. This was a company that operated horribly merchandised stores with a strange product assortment and awful operational execution. They were truly cursed with a terminal case of the reverse Midas touch. In fact, when Fresh & Easy finally declared bankruptcy in 2013 and ultimately sold the company, they actually paid buyer Ron Burkle’s Yucaipa Cos. more than $200 million just to take this loser off their hands (“take my wife, take my wife, please take my wife!”).
However, we now may have a rare opportunity to witness another failure on a smaller scale than Fresh & Easy, but just as potentially woeful on several levels.
You know what I’m talking about – New York City Mayor Zohran Mamdani’s plan to open five city-owned grocery stores (one in each borough), a move designed to lower food costs for those Big Apple residents struggling with affordability.
The first of those stores was recently announced as Mamdani celebrated his first 100 days in office. The location will be a city-owned property, La Marqueta in East Harlem, which has served as kind of an urban farmers’ market since the 1930s (the new 9,000 square foot store will be built on an empty lot and will not displace current vendors).
While Mamdani claims “eggs will be cheaper, bread will be cheaper” at his discount market, he has yet to disclose the cost to NYC’s taxpayers and the impact it might have on other food retailers in the city that operate with no subsidies and pay the most expensive rents and service fees of any market in the country.
Under Mamdani’s plan, the new store will not pay any rent or taxes.
Mamdani projects that the La Marqueta site will cost New York about $30 million to build (that estimate’s going to be way light even if the city already owns the property). Originally, he planned to budget $60 million for all five supermarkets.
Mamdani’s vision has been attempted before in about half-a-dozen cities without success.
The fundamental challenges of 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 who has no knowledge of how capital and labor intensive this business really is.
It’s also blatantly unfair to other grocery retailers in NYC who will not be playing on a level field, and also to most taxpayers who are going to see millions devoted to a cause that seems likely to fail even if its intentions are good.
And then there are some other “small” details to consider such as finding an outside operator to run the store as well as developing a distributor and supplier network to service the community markets and hiring a unionized staff that will need to be well-trained.
I’m predicting this exercise will cost New York City, which is already facing a major budget deficit, more than $150 million and will end in failure. It’s just another bad plan/policy in a line of many that has helped drive tens of thousands away from the Big Apple over the past five years.
Local Notes
I would have never guessed that West Orange, NJ would emerge as a food retailing hotspot, but two high-volume retailers have their sights on that Essex County town – Target and Trader Joe’s. Tar-jay opened its 150,000 square foot unit on March 29 and TJ’s 18,767 square footer is likely to open late this year.
Allegiance Retail Services (ARS), the independent retailer-owned co-op, has launched a new supermarket format – Pathmark Daily. According to the Iselin, NJ-based company, “The concept, small format stores that offer a curated assortment of high-quality fresh foods and essential grocery items to support a healthy lifestyle, all anchored in affordability and everyday value. By focusing on what consumers need most, Pathmark Daily will deliver quick access to high quality produce, meats, seafood, and everyday staples, with the convenience of neighborhood shopping. The grocery stores will feature the Best Yet store brands, competitive weekly sales items, in-store specials, and Pathmark’s robust loyalty savings program to help customers stretch their grocery budgets.” ARS member Mike Said, who will open the first Pathmark Daily in East Meadow, NY on May 1 said, “Bringing Pathmark Daily to our neighborhoods answers the needs of our shoppers. It makes their life easier by offering a quick, convenient shopping experience without sacrificing value, quality or savings. We are proud to be a trusted community partner by providing competitive weekly sales, specials, and Pathmark’s robust loyalty savings program in a smaller concept store designed for today’s modern lifestyle.”
In my never-ending quest to highlight musicians who recently passed away and were great at their craft but sadly were underrated or unsung during their careers, I note the deaths of Chip Taylor and John Hammond. Taylor, 86, was best known as a songwriter, so it’s not surprising his name isn’t that well-known, but other singers had big hits with his tunes. Those hits included “Wild Thing” (The Troggs – and a great Jimi Hendrix version, too); “Angel in the Morning” (Merrilee Rush); “Try (Just a Little Bit Harder)” (Janis Joplin); and “Shilo” (Neil Diamond). Taylor was inducted into the Songwriters Hall of Fame in 2016. One more trivial fact: Taylor’s birthname was James Wesley Voight and his older brother is Academy Award winning actor Jon Voight.
Also passing on was John Hammond, the excellent blues singer and acoustic guitar player who helped revitalize the genre in the early 1960’s in New York City. His first album, “John Hammond,” (1963) was a compilation of songs by old Blues masters such as like Blind Lemon Jefferson, Lightnin’ Hopkins and Big Bill Broonzy. Hammond’s encyclopedic knowledge of the history of the blues and his raspy, booming voice and slide guitar expertise earned him great praise from his peers and from music critics. Hammond was nominated for six Grammys during his long career and won once. He was a contemporary and friend of Bob Dylan, which is noteworthy because his father, John H. Hammond, was responsible for signing Dylan to Columbia Records and produced his first two albums. The younger Hammond was 83 when he died.
And there’s one more musician who has left us who’s much more popular than Taylor and Hammond. Dave Mason, the British-born singer, guitarist and songwriter, died earlier this month at the age of 79. Mason had a Zelig-like career, but he was best known for being part of the seminal rock group Traffic in the late 60s. He moved permanently to the U.S. in 1969 and had a long solo career, touring constantly for the 55 years. Unknown to many was his great guitar playing which can be heard on Jimi Hendrix’s version of “All Along the Watchtower.” He also played on albums released by George Harrison and Paul McCartney. Mason also toured with Delaney & Bonnie and worked in the studio with Eric Clapton prior to the release of his Derek and the Dominoes album in 1970. Mason was also an eclectic songwriter, penning iconic tunes such as “Feelin’ Alright” (1968) and “Only You Know and I Know” (1971). He also had a big hit with “We Just Disagree” (1977). If you’ve never heard Mason’s work, I’d suggest you listen to “Alone Together,” his 1970 debut album. Mason was inducted into the Rock & Roll Hall of Fame in 2004. In summarizing his lengthy career, Mason noted: “I’ve been through four earthquakes, three marriages, two bankruptcies, one major hurricane and I’ve survived the music business. That’s a pretty good record.”
