New York Retailers Exhibit Strength During Adversity

Originally printed in the July 2020 issue of Produce Business.

Metro area supermarkets and independent stores tell a story of relationships, responsibility and resiliency in serving customers and providing stability in unstable times.

With more than 20 million residents, the New York metropolitan area remains, by a significant margin, the most populous in the United States. It also remains one of the largest and most diverse retail environments, as well.

The city’s wholesalers, distributors and retailers face daily challenges in keeping such a large and diverse market fed. “The demographic population in our area challenges us to keep up with various food cultures and ensure we carry it,” says Charlie DiMaggio, president of FresCo LLC, on the Hunts Point Market. “With just the five boroughs of New York City having a population of over eight million people and millions more who commute into Manhattan daily on any given normal day, this presents itself as a daunting task to keep all of the families and restaurants adequately supplied.”

While the New York City metro area encompasses a diverse representation of chains, the majority of stores, especially in the city, are smaller independents. “We generally sell to mom-and-pop retailers,” says Ira Nathel, president and owner of Nathel & Nathel on the Hunts Point Market. “In the city, there aren’t that many big chain stores, so we supply smaller and independent retailers. Specialty stores dominate a good part of the landscape here.”

According to Los-Angeles based market research firm, IBISWorld, New York City accounts for 66.7% of supermarkets and grocery stores in New York State. It reports that, due to both high rents and population density, stores are smaller in size and more numerous. With shoppers having typically higher incomes in these areas, specialty grocery stores and upscale national chain grocers such as Trader Joe’s and Whole Foods are also popular, the report further states.

Besides its diversity, New York is known for its vibrant environment. “New York is a dynamic market and because of the independent stores and restaurants it’s a great place for produce,” says Ronnie Cohen, principal for Vision Import Group in Hackensack, NJ.

The New York marketplace is always busy, states Gabriela D’Arrigo, vice president of marketing and communications for D’Arrigo New York on the Hunts Point Market. “We are the city that never sleeps,” she says.

Philip Penta, managing partner at 3 Guys from Brooklyn, an independent open air, old school corner market, relates the word competitive doesn’t come close to describing retailing in New York. “In this area in Brooklyn, there’s probably a fruit stand on every corner,” he says. “So we need to have an edge. We are 90% produce so it’s a very intensive business. It’s not for the faint of heart.”

Retail Resiliency

Certainly, New York food sellers and handlers were able to test their strength this year during the COVID-19 pandemic. “Typically, New York is a super competitive marketplace,” says Cary Rubin, vice president at Rubin Bros. Produce Corp. on the Hunts Point Market. “That’s the business. Initially when the crisis happened, things became chaotic—everyone was just happy to get product.”

You can never predict produce, says Dara Sblendorio, president and owner of Sunrise ShopRite, which operates two ShopRite supermarkets in northern New Jersey and serves as the chair of the produce committee at Wakefern Food Corp. “It’s susceptible to so many different things so we’re already somewhat built for disruption; this just exacerbated it all.”

As supermarkets scrambled, many independent stores became a new-found gem in their communities. “It was remarkable to see how neighborhood grocers that had been forgotten by many because of big box retailers, online giants and people dining out were able to step up to the plate and service the needs of our communities,” says Jason Ferreira, chief executive of Ferreira Foodtown in Jackson Heights, NY, which has four stores. “At our stores, customers were able to find what was unavailable at the national and regional chains, the club stores and the big box discounters.”

“It was remarkable to see how neighborhood grocers that had been forgotten by many because of big box retailers, online giants and people dining out were able to step up to the plate and service the needs of our communities.”

— Jason Ferreira, Ferreira Foodtown

Thomas Tramutola, Jr., manager at A&J Produce Corp. on the Hunts Point Market, reports seeing an increase in volume from chain stores both small and large. “Some stores were taking 200% to 300% more than they normally would,” he says.

Food stores also took on a leading role in providing some assurance to the public. “As the business owner, I felt very deeply that my goal was to be as consistent and constant as we could for our community,” says Sblendorio. “Amidst of all the anxiety folks dealt with, it was important for them to know they could rely on their local Shoprite and that we would be there for them. I will never forget the sense of responsibility I developed through this, and I know it will help guide me through the rest of my career.”

Retailers transformed themselves into rays of hope and a place to purchase some security, agrees DiMaggio. “As adults, we have been programmed to be providers for our families,” he says. “While most of us do not go hunt, fish or grow our food supply, we run to the stores as early as possible to grab pineapple, mango and plantains to supply nourishment and comfort for our families. Comfort foods became that security blanket that everything will be okay.”

At Good Harvest 4th Street Food, a mostly organic and vegetarian food coop in Manhattan, the mission to serve its specific membership took on new urgency. “It was important for us to continue to serve our members,” says Yoli Ouiya, specialty buyer and co-op member. “And, to not only provide food but to continue to honor our commitment to sustainability and health.”

Relying On Relationships

Flexibility and relationships in the supply chain played a major role in giving retail consistency. “We’ve been quite resilient with respect to supply,” says Sblendorio. “We were dealing with everything from logistical impact to reduced availability of some product, but we were able to adjust and meet the challenge to ensure our consumers still receive the food they need.”

For example, Sblendorio mentions focusing on SKU optimization. “We were able to work together with our suppliers to ensure we had something on the shelf for our customers,” she says. “Instead of carrying 12 different apple varieties, we may only have had six but at least we had a selection of apples.”

Ferreira of Ferreira Foodtown says the company was flexible in procuring products from different vendors, suppliers and sources in order to keep shelves stocked and stores open. “New Yorkers were understanding and sympathetic, respecting social distancing and safety measures, and they were cooperative,” he says. “Many returned to cooking at home, and it has been seen in the way customers have been shopping.”

“We were dealing with everything from logistical impact to reduced availability of some product, but we were able to adjust and meet the challenge to ensure our consumers still receive the food they need.”

— Dara Sblendorio, Sunrise Shoprite

Ouiya expresses the importance of supplier support during the crisis. “It has been fascinating and eye-opening in terms of looking at the produce supply chain and seeing how well it actually functioned,” she says. “Some of our biggest vendors, such as Baldor, hung in there and I’m grateful they continued to serve us so well and consistently.”

Retail customers relied on Baldor Specialty Foods, in Bronx, NY, throughout the crisis. “These markets still needed a dependable source of fresh produce and food items for their customers at a time when many of their other suppliers faced shortages, so we were more than happy to supply them with what we could,” says Michael Muzyk, president. “While we have a well-oiled distribution chain that’s made all this possible, we’re still a family-run company, helping out family businesses, so we’re not too automated that we can’t incorporate last minute requests when they really need it.”

Sblendorio notes the importance of the interplay between Shoprite stores and Wakefern. “We have this really unique dynamic covering the entire supply chain,” she says. “Wakefern has worked to develop strong relationships with the suppliers. Shoprite retailers have regular meetings (virtually) with the Wakefern procurement team. So as issues came up, we were able to work through them together. The open lines of communication have been crucial.”

An Indefinite Journey

During the height of the crisis, retailers could only hang on and try to adapt to the rollercoaster market. “Speaking as an operator, it has been a never ending journey of change in terms of how we operate our supermarkets and how our warehouse and procurement staff have had to operate,” says Sblendorio. “You figure out the new version of work every day you get up.”

The business has changed a lot, adds Marc Goldman, produce director for Morton Williams in Manhattan, which has 16 stores. “It’s been in stages,” he says. “In the beginning, it was more chaotic and also people were buying more groceries than anything else for the first couple of weeks. Then it settled down, and at that point produce and meat went up a lot.”

“We see continued increase in all the cut veg items we do fresh in the store every day, such as the zucchini noodles, cauliflower rice, and broccoli rice. We’re selling even more of this, as people cook more at home.”

— Marc Goldman, Morton Williams

Ouiya reports the food co-op saw the same movement. “At the beginning of the crisis, there was some shift in shopping habits—the panic-type shopping that everyone saw. However, in April and May, we began seeing a more relaxed shopping pattern,” she says.

Retail experience was also affected by city demographics. “In some of the more affluent areas of Manhattan, people just left,” says Goldman. “After the initial chaos settled, we saw a significant drop off in sales in our stores in more affluent areas. And, our store right by Columbia University saw a decline when the students left.”

Another casualty of the crisis height was advertising. “One major effect we saw was that no one really advertised or promoted during the crisis,” says Rubin. “Advertising is a big thing in the New York marketplace, and it went away during this period. It just started to come back in May, as some retailers began to ask for ad pricing again.”

After the obvious changes required by government protocol, retailers were challenged to look at product and merchandising changes necessitated by the new marketplace. Because Good Harvest 4th Street Food has such a small footprint, it was able to quickly implement proactive measures without making large changes to merchandising or sourcing methods, shares Ouiya. “And, we’ve gone to great lengths to have sustainable protocols,” she says.

Goldman reports the Morton Williams produce department is basically laid out the same, but some priorities are different. “People aren’t buying as much cut fruit as they did before but they’re buying more cut vegetables,” he says. “So we shifted space more toward cut vegetables. We see continued increase in all the cut veg items we do fresh in the store every day, such as the zucchini noodles, cauliflower rice, and broccoli rice. We’re selling even more of this, as people cook more at home.”