2012 New York Profile: Headed Down Right Track
by Ashley Bates/staff writer
It’s becoming a New York state of mind to “buy local,” and retailers along with the state legislature have come together to promote the thousands of New York products made and produce grown in the state.
“There really is a movement; the state has even introduced legislation here called ‘SHOP: Pride of New York,’ and it was created to encourage both restaurants and grocery stores to buy local,” said Jim Rogers, president and CEO of the Food Industry Alliance of New York State (FIANY). “The grocers that I’m seeing within our membership all are very big into the ‘buy local’ issue. In fact, a couple of years ago, we even conducted a seminar because if you are going to buy local then of course you want to make sure that the products you are buying off the farm are safe products and they are handled in the proper way in the field.”
Both agricultural products grown and food products processed within New York State are part of the SHOP: Pride of New York program, its website says. Its growing membership now includes farmers and processors, retailers, distributors, restaurants and related culinary and support associations, all working together to bring New York State products to consumers.
Legislature looking at issues impacting grocers
The New York legislative session ended on June 21, and several issues that concern the New York grocery industry were hot topics as the session wrapped up, including a raise in the state’s minimum wage.
“It would go from the current $7.25 to $8.50 in one jump,” Rogers said. “After that, it would be indexed for your cost of living.”
The bill also would provide for increases in minimum wage based on the urban cost-of-living adjustments.
According to hudsonvalley.ynn.com, Senate and Assembly members had all but ruled out an increase to the state’s minimum wage before the session ended.
What FIANY wants to see is for the bill to be revised to reflect a smaller increase in the minimum wage and to do it over the course of a couple years.
FIANY wants to “get rid of indexing, and that jump has got to be multi-year,” Rogers said.
Another new bill supported by FIANY would allow retailers to apply for temporary WIC licenses.
“If you have a WIC license in good standing and you buy another store, then you should be able to get a temporary WIC license in less than a two-week period. Then you operate with that temporary WIC license until you get your permanent WIC license for that store,” he said.
Neither Rogers nor any of his members are pleased with another proposed bill that would require grocery baggers to have special training.
“This one is crazy. It would require mandatory training for people to pack grocery bags. There is a fine that could range upwards of $500 if the person hasn’t been properly trained to bag groceries,” Rogers said. “We’ve explained to the sponsor that we are only well served by showing our folks how to pack grocery bags and we aren’t looking to use more grocery bags than we have to anyhow. And a lot of times, customers tell you how they want their grocery bags packed.”
FIANY also is opposed to a proposed ban on candy and sweetened beverages at the checkout.
“I think this is equally as stupid—a ban on candy and sweetened beverages at checkouts,” he said. “You couldn’t have any displays by your checkout counter of candy or sweetened beverages.”
A possible ban on sodas larger than 16 oz. that recently was proposed by Mayor Mike Bloomberg in New York City has sparked the creation of the New York Association of Grocery Stores (NYAGS). It says its goal is to “stop the assault against grocery stores as well as the foodservice industry all over New York by the mayor and other government officials,” a news release said.
“The city continues in its quest of becoming a nanny state in regulating every aspect of the lives of the citizens of New York City and in the process, crushing small business,” said co-founder David Schwartz.
“NYAGS will vigorously protect business throughout New York from overreaching and unnecessary regulatory measures. NYAGS will help unite the fight against the recently announced Big Soda Ban by the NYC Board of Health,” co-founder Brad Gerstman added.
New York City business leader, philanthropist and owner of Gristedes supermarkets, John Catsimatidis, has pledged his support for NYAGS.
“We need NYAGS at this moment in time in our history because brick and mortar convenience stores, grocery stores and supermarkets are being destroyed because of anti-business government policies that have strangled the retail industry,” Catsimatidis said.
NYAGS has the support of the Bodega Association, the Latino Restaurant Association and the Korean American Small Business Center.
“The ban is not only counterproductive to the promotion of health but it fails to consider other health initiatives from this administration such as the menu labeling requirements. The impact of these regulations on the health of the city’s food stores and restaurants has been extremely detrimental,” said Ramon Murphy of the Bodega Association.
The city Board of Health unanimously approved the proposal. A public hearing will be held July 24 with a final vote expected on Sept. 13.
Economic recovery slow but starting
In comparison to surrounding states, New York seems to be on a slow track to economic recovery. The unemployment rate is just above the national average and the labor force in expanding, but Buffalo Business First reported that foreclosure starts increased by 59 percent across New York State in May compared to a year ago, according to RealtyTrac.com of California.
State Attorney General Eric Schneiderman implemented a funding initiative on June 18, called the Homeowner Protection Program, aimed at helping New Yorkers struggling under the burden of home foreclosure.
His office will commit $60 million over the next three years to fund the program, which will assist homeowners with housing counseling as well as legal assistance.
Rogers says that he thinks the economy is faring well.
“As of April, the unemployment rate was 8.5 percent. We always used to be below the national average and now we are above the national (8.2 percent), but interestingly enough there were five states that now have regained all the private sector jobs that were lost with the Great Recession, and New York is one of them.”
New York added 6,100 private sector jobs in May and since the beginning of the state’s economic recovery in November 2009, it has added 336,900 private sector jobs.
In May 2012, the state’s labor force increased by 28,200, the largest jump in monthly labor force levels since late 2001.
Store openings add up to new jobs
Albany, one of the most competitive grocery markets in the state, has seen new jobs added thanks to the opening of a couple of new grocery stores.
“In Albany—a highly competitive marketplace over the past year—we have Price Chopper and Hannaford Bros.; we’re not really an independent market here in the Albany area,” Rogers said. “ShopRite has come into the area. They built a store in the suburbs of Albany and they’ve opened another in the confines of Albany. They’re going to be opening another store. I think they have plans for maybe four stores.
“A Trader Joe’s is opening in Albany, and I think in less than two years there is going to be a Whole Foods coming to Albany. We also have Fresh Market up here as well,” Rogers added.
North Carolina-based The Fresh Market added to its New York presence in January with a new store in Scarsdale. Located at 23 White Plains Rd. in Scarsdale, the new store is about 22,000 s.f. and is the second for the chain. The first New York Fresh Market opened in July 2010 in Latham, north of Albany, at 664 West Loudon Rd. It is 23,000 s.f.
The Fresh Market is seeing success, with its net income jumping 43 percent during the first quarter of fiscal 2012 compared to the prior year—$19.3 million vs. $13.5 million. Net sales were up 22.8 percent to $324.8 million and comparable store sales increased 8.2 percent during the quarter.
“We are proud and excited to report another strong quarter of both sales and earnings growth,” Craig Carlock, president and CEO, said in a statement.
The Fresh Market plans to open 16 new stores this year, including three that opened in the first quarter. The company has 116 stores in 21 states.
There also is speculation that a new Fresh Market will open in Niskayuna, reported Bizjournals.com.
Company officials won’t say, and neither will the owner/developer of Mansion Square, the new shopping plaza across the street from the Mohawk Commons retail center on Balltown Road in Niskayuna. But the stars seem to be aligning that way, according to a recent Bizjournal blog.
The blog cited three reasons why it is believed that another Fresh Market is headed to Albany: John Roth, president of Highbridge Development, the owner of Mansion Square, said on June 12 that he has a signed lease with a retailer to fill 40,000-s.f. space but could not disclose the name; a site plan approved by the Niskayuna planning board identified the new tenant as a “food market”; and Niskayuna’s demographics—the town has one of the wealthiest zip codes in the region—would support a high-end, specialty grocery store, the report said.
The company typically announces new leases when it releases quarterly earnings. Based on the timing of the first quarter earnings statement, the next one would be released in late August.
The popularity of The Fresh Market follows current trends for prepared foods, which Fresh Market always has specialized in. A recent Packaged Facts consumer survey showed that the key to fresh convenience food market growth in the face of the 2008-09 Great Recession and still unstable U.S. economy is the trend that consumers have traded down from restaurant meals in favor of fresh prepared foods. Since the recession began, 49 percent of the adults surveyed reported that they had eaten at fast-food restaurants fewer times and 50 percent said they’d eaten less fast-food takeout, while 61 percent said they’d eaten less often at sit-down restaurants. In other words, restaurants experienced a significant drop-off in consumer demand even as relatively few consumers cut back on grocery spending.
“It’s kind of interesting to have that company to open stores here in New York State, but I think Albany is a extremely competitive market right now,” Rogers said.
In New York City, Whole Foods Market has been approved to build a 52,000-s.f. store in Brooklyn on the Gowanus Canal, according to the New York Daily News.
Stores that size are not usually allowed by local zoning rules, the paper said, but Whole Foods has gotten approvals and plans for a mid-2013 opening date.
A&P in remodeling mode
A&P emerged from bankruptcy protection in March, and with a $490 million capital infusion to work with, embarked on a store improvement plan to provide “exceptional value and an enhanced in-store experience to all of our customers across our more than 300 neighborhood food and drug stores,” President and CEO Sam Martin said at the time, with a goal of renewing the majority of its store footprint over the next five years.
In mid-May, A&P unveil its newly remodeled Food Emporium at 1066 Third Ave. in New York City. A&P said the 16,000-s.f. Upper East Side store now offers a larger selection of gourmet foods and more locally grown products in an “appealing store environment with modern fixtures.”
The ground floor features café seating, where customers can sip on their favorite drink from the new coffee bar, while eating breakfast, lunch or dinner items from the expanded hot food section. The lower level also has a broader selection of grab-and-go items for city customers.
Customer service improvements were also implemented; more than 20 new associates were hired and trained to better serve the needs of customers in every department of the store.
The store offers an expanded selection in several categories: organic and natural, gluten-free, kosher, Eastern European, Hispanic and Asian foods, seafood and produce.
Much of the produce is locally grown in New York and Long Island, A&P said, and in seafood, fresh fillets and steak fish are delivered daily from the Fulton Fish Market. The expanded meat section offers all-natural chicken, fresh ground beef and A&P’s exclusive brand of Woodson & James Angus steaks.
The Third Avenue Food Emporium store is the fifth location to receive an overhaul since November 2011. The first two to reopen with the new look and offerings were at 1st Avenue and East 72nd Street and Second Avenue and East 86th Street in New York City.
“The renovations of these two stores gives us reason to celebrate and shows our renewed commitment to our New York City customers,” `Martin said at the time. “Our goal is to improve the experience that shoppers have in our stores, and these upgrades are a big step forward in that direction. In addition to new fixtures and cleaner and brighter decor, we’ve also added more associates to help our Upper East Side customers. Together, these two remodeled Food Emporiums will offer added convenience, a friendlier store environment, and a wider selection of items to meet the specific preferences of our neighborhood customers.”
Some A&P-owned stores that the chain has chosen to forego are getting new tenants as well.
Korean grocery chain H Mart has secured a deal to replace the Bayside Waldbaums store that is set to close in July, the NYDailyNews.com reported on June 18. All 77 employees at the Waldbaums store are being offered positions at other A&P stores, said a spokeswoman for United Food and Commercial Workers Local 342.
“H Mart happens to be an incredibly well-run organization,” said Michael Marmon, a spokesman for real estate management company Marmon Enterprises. “It gives people a lot of options in terms of what to shop for.”
Marmon said the H Mart could be up and running as early as September.
Another A&P-owned store, a Pathmark on Northern Boulevard in Long Island City, is closing in August. A Food Bazaar will replace it, said Kevin Bay, VP of Bogopa, which owns Food Bazaar.