The New York Times has an interesting story about how Gristedes, long a fixture on the New York food retailing landscape, is slowly but surely fading away. “The number of Gristedes stores has dropped from 78 a decade ago to 39 today (35 stores are in Manhattan), as a once familiar New York City name continues to recede,” the Times writes, noting that at last one analyst expects the company to eventually be down to just 25 stores.
The reasons for the company’s decline are varied. There are more competitors than ever before, ranging from neighborhood delis to gourmet stores to specialty stores like Whole Foods and Trader Joe’s. Rents and utility costs are skyrocketing in the city, making it difficult for stores like Gristedes to made any money without raising prices, a strategy that ownership feels would reduce the already dwindling customer base. And, the Times suggests, there is the additional problem of stores that simply have not kept up with the times – they can be dirty, poorly stocked, and without the kind of product mix that city residents desire.
However, Gristedes chairman John Catsimatidis tells the Times he is staying in the business.
“Mr. Catsimatidis is also the sole owner and chief executive of the Red Apple Group, of which Gristedes is a part,” the Times writes. “It has interests in real estate, aviation and United Refining, a petroleum facility in Warren, Pa., that provides gasoline for nearly 400 gas stations and, as Mr. Catsimatidis puts it, meets ‘petroleum needs for between Buffalo and Pittsburgh.’ Of the privately owned Red Apple’s $3.7 billion in annual revenue, only $250 million, or less than 7 percent, comes from Gristedes, which is all of its supermarket business.”
“If Gristedes had to live on its own,” Catsimatidis tells the Times, “it would be very hard. But Red Apple Group is a very strong entity.”
The reasons for the company’s decline are varied. There are more competitors than ever before, ranging from neighborhood delis to gourmet stores to specialty stores like Whole Foods and Trader Joe’s. Rents and utility costs are skyrocketing in the city, making it difficult for stores like Gristedes to made any money without raising prices, a strategy that ownership feels would reduce the already dwindling customer base. And, the Times suggests, there is the additional problem of stores that simply have not kept up with the times – they can be dirty, poorly stocked, and without the kind of product mix that city residents desire.
However, Gristedes chairman John Catsimatidis tells the Times he is staying in the business.
“Mr. Catsimatidis is also the sole owner and chief executive of the Red Apple Group, of which Gristedes is a part,” the Times writes. “It has interests in real estate, aviation and United Refining, a petroleum facility in Warren, Pa., that provides gasoline for nearly 400 gas stations and, as Mr. Catsimatidis puts it, meets ‘petroleum needs for between Buffalo and Pittsburgh.’ Of the privately owned Red Apple’s $3.7 billion in annual revenue, only $250 million, or less than 7 percent, comes from Gristedes, which is all of its supermarket business.”
“If Gristedes had to live on its own,” Catsimatidis tells the Times, “it would be very hard. But Red Apple Group is a very strong entity.”
- KC's View:
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I’m neither as smart nor as rich as Catsimatidis, but I have to say here that I don't understand the point. The Times suggests that even as the company fades into the woodwork and becomes almost irrelevant to New York shoppers, management isn’t willing to invest what is needed to really be competitive with the likes of Whole Foods. So why stay in business?
It wasn't that long ago that Catsimatidis was looking to buy Kings Super Markets in New Jersey, which might have changed the game for the company. But that didn’t happen.
Either Catsimatidis has another agenda, or the Times didn’t ask the bottom line question. Or both. But I don't understand the point of staying in business if you aren’t going to compete both energetically and enthusiastically.
