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Gristedes Owner Predicts Rents Will Drive Supermarkets Out of NYC

2007_09_gristede.jpgNo one has been surprised that Gristedes supermarkets have been closing steadily over the past ten years, given the influx of other grocery options and rising rents. But the NY Times has a fascinating article on why Gristedes still manages to exist, despite shrinking in size.

Right now, there are 39 Gristedes locations, while there were 78 in 1997, and a supermarket consultant believes that there will be just 25 Gristedes locations in the city. But John Catsimatidis, who owns the company, explains to the Times that his other company, Red Apple Group, is profitable, thanks to investments in real estate and oil. In fact, Red Apple had $3.7 billion in revenue, and "only $250 million, or less than 7 percent, comes from Gristedes."

Catsimidis credits Red Apple's strength with keeping Gristedes around and says he's not abandoning supermarkets. He does think there's trouble ahead: "The problem in New York City is you’re going to be left with no supermarkets" thanks to high rents. Some numbers:

Mr. Sarf, the retail consultant, said the monthly rent at a supermarket in Gramercy Park recently quadrupled, to $120 a square foot from $30.

Supermarket profits 10 years ago, before the real-estate boom, were high, Mr. Catsimatidis said, exceeding 10 cents on the dollar. Now, profits are down to 3 or 4 cents on the dollar.

“People complain supermarkets are too expensive,” Mr. Catsimatidis said. “You have to laugh. We’re not making the bottom line, and people complain we’re too expensive.”

Hmm, real estate boom = lack of regular every day options for people? And, sure, there are gourmet grocery stores which can charge a premium on products, but traditional supermarkets have been disappearing.

We're curious - where do you shop?

If you shop other places, tell us in comments. And let us know which store experiences you prefer!

Photograph by Triborough on Flickr

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Comments [rss]

  • mugs

    Good riddance!! And Catsimatidis can laugh all he wants- if staff in Canadian supermarkets were as pissy and rude and generally bloody awful as his staff, they'd be fired on the spot. It is arrogance and greed and bad hiring policy which has driven his stores out of business. Good riddance, get lost, and leave room for a descent store to open in the neighbourhood. And I hope the awful staff at the 96 St/3rd Avenue store find themselves on the breadline. Here's a piece of advice- remember that the customer pays your wages. No customers, no wages. And if you're so unhappy with your job, get off your lazy butt and find another one you miserable whiners!!!!!!!!!

  • guest

    farmers'market is not bad.



    classic games:

    http://www.bizdrv.com/company/list/i151040-r/Gaming.shtml

  • guest

    You can't go home again to Wegman's. I tried that, thinking that it would still be like I remembered it from Sheridan Drive in Buffalo. It's not. It's gone totally upscale. Don't go back to Wegman's if you want to remember it as it was 20 years ago.

  • Mike D

    I love Wegman's from my youth in Upstate New York. Where's the closest one down here?

  • JMH

    [25] wrote:

    And when I want to treat myself I head for Wegman's in New Jersey. Manhattan supermarkets should take a lesson from them.
    Seriously. I wish they had a location in the city.

  • guest

    Fresh Direct. Less attitude and spoiled produce than my local supermarkets.

  • guest

    I enjoy the convenience of shopping at the bodega downstairs from my walkup. Where else can I buy plantains and canned beans, along with ritual ornamentation for santeria.

  • guest

    Gristedes is opening a store in the Financial District (Maiden Lane I believe). If ever there was neighborhood to overcharge in, FD is it. The 20-something bankers think nothing of shopping at Zeytuna and Jubilee which are overpriced although they do have nice atmosphere. I like the Pathmark on Peck Slip. Much cheaper.

  • guest

    I shop mainly at the Koreans' around the corner - it's convenient and I enjoy paying their inflated prices.

  • guest

    I shop at Whole Foods, Trader Joe's and Western Beef. I get my produce from the Community Supported Agriculture (CSA) program in Chelsea. I go into Gristedes for one or two items only. It's a very depressing and unpleasant place to shop. I've noticed that the help has become more friendly in the past year, and that the store no longer adds a dollar to the price of items on sale. The last time I was there it was almost completely empty. The elderly people who used to shop there from my development now make the trek to Whole Foods. It's just a matter of time before all of them close, unless Mr. C. decides to continue to subsidize them.

  • when small grocery owners begin to realize that quality and customer service matters more, then their businesses won't get bought out or closed up for good. until then, honestly, i couldn't care less.

  • guest

    Catsimidis is the sleaziest man in New York. Maybe if he stops burning his supermarkets down, he'd have more of them.

  • guest

    Gristedes is seedy.........and I had a thug mutter how he'd like to fuck me as he lurched past me at the LES WF.





    One of the things I miss about LA is the produce at Ralphs--which is the equivalent of Food Emporium.

  • guest

    I live in a neighborhood that has a farmers'market twice a week, so that's enough to get almost all of my shopping now. Even the street vendors around city hall have fairly good (and cheap) produce. For milk, the drug stores are often much cheaper than any supermarket. So what does that leave to buy? Coffee at a specialty store. Who needs a Gristedes?

  • guest

    #35 Are you black or a down and out hipster dude?

  • guest

    TJ's accepts food stamps, I know, I've used mine there. don't know about WIC, I'm not a woman nor an infant or children.

  • guest

    I shop at Gristedes, Costco, a Chinese market in Flushing (best for good produce at a decent price), my local Associated, Zabar's, K-Mart for some paper & household staples, Fairway, the Union Square green market (tomatos, corn). I have always been a selective shopper -- isn't everybody? I would hate to see Gristede's go but am not a one stop shopper. I do not have a car which influences my shopping patterns.

  • guest

    No, you do get blacks at WF - but the good kind, like the willowy caramel types that me yearns for...

  • guest

    Yo, does Whole Food be acepting food stamps and WIC? Sheez, my childin and I gots to eats better and lose the wait!

  • guest

    #28 Hmm, I've never bothered noticing that, but yes, that appears true - even at TJ's. It's almost as if there's a sign posted outside... LOL

  • rarelement

    d'agostinos is a regular supermaket?! that's rich - they are the most overpriced chain in the city. at least citarella makes the pretensions that they're rich - d'ag tries to show off like they're a neighborhood shop. disgusting.

  • guest

    I buy most of my food at farmers' markets. Paper and cleaning supplies at whatever shop is convenient, sometimes WF or D'Ag or other local shop.

  • guest

    the best part about whole foods is that blacks don't shop there. Sure you got some working behind the counter but it sure beats rubbing elbows with them.

  • guest

    Sounds like a good thing Gristedes is going down the drain.

    Champagne anyone?

    Rock on Whole Foods We love you...

  • guest

    Anyone know why the Gristedes on 86 by Lex closed...?

  • guest

    The reason Gristede's is not doing well is because they're awful places to shop. I live near the one on Hudson street and it's gross, it smells, the produce is disgusting. It used to be a disgusting Associated, then it became a Gristede's and it was nice for about five minutes and then it became just as disgusting as the Associated. Good riddance.



    Like most Manhattanites I shop in a variety of stores depending on my needs week to week....including Fresh Direct. And when I want to treat myself I head for Wegman's in New Jersey. Manhattan supermarkets should take a lesson from them.

  • guest

    I prefer my delapidated little Met Foods at 96 and Lex...

  • guest

    i'd say I go to costco once a month, target twice a month, kmart once a month, whole foods once a week, trader joes once a month, and ctown or keyfood once a week. pathmark is too expensive, target is much better. The best combination is costco, target, and trader joe's. but i can't stomach the lines for trader joes so I go to ctown for the perishables.

  • guest

    The Costco in Brooklyn (the one by the Gowanus) is the highest grossing Costco store in the company. So I believe a lot of people do shop there, but do not read this blog.

  • guest

    Food Emporium sells the same stuff as Gristedes, often for cheaper prices. Whole Foods sells much higher quality foods for cheaper prices. If Gristedes can't meet its bottom line it is not because of the rent. It is because no one wants to shop there. The stores are awful and the prices are ludicrous.

  • guest

    John C is a greedy fat-ass mayoral wannabe who holds out on his employees' benefits!

  • guest

    By NYC they mean Manhattan only right?



    Now some organization will fill the void if supermarkets can't operate in Manhattan. There is Fresh Direct which delivers food and does not need a Manhattan presence for food storage. (Trader Joe's should deliver like FD. They'd make a killing.)



    By the way, when is there going to be a supermarket below Houston St and east of Allen St? A Whole Foods opened on Houston. But its not a practical supermarket. We need a supermarket darn it!

  • Reflect

    I Just made the switch to Western Beef this week. A checkout lady was nice enough to tell me to shop somewhere else. She said it was way cheaper. Somethings up when the people that work there know better. I tried Western Beef and sure enough I came out with two extra bags full of stuff. Wasted 3 yrs shopping there wont do it agian.

  • guest

    guest #15-- people might not go to Costco because some might want to shop closest to their homes or on their way home from work... not make a special trip to go shopping. not to mention dealing with aggravation at Costco itself. and buying huge items in bulk. (not having a lot of storage in apts. is only one reason)

  • Nick S

    gristedes. icckkkk.

  • guest

    wow. I can't believe only 3% shop at costco. IT's the best!!! i only need to shop their once a month and stock up on stuff that's half the price of whole foods, the only thing you shouldn't buy from there is milk, bread and eggs cause that stuff perishes faster and is the same price pretty much everywhere.

  • guest

    His prediction that there won't be any more supermarkets in NYC is wrong. There won't be any Gristedes. They are not a nice or inexpensive place to shop.



    St. Marks Market, Whole foods, Trader Joes, Greenmarket (Union square and Thompkins Square), Fresh Direct, Village Farm and local butchers/specialty shops (3rd Ave cheese!)

  • guest

    Like many people, I shop all over--Foodtown for the basics, Wholefoods for special occasions, Target for cereal and other big bulk items, Trader Joes for snacks, dairy, and some produce. But this article is also pretty depressing. What are regular middle class people supposed to do, let alone poorer New Yorkers? Sure, I shell out $4 for half a gallon of organic milk because I prefer it, but it would be unreasonable for those prices to be de riguer on all my items. I wonder if a similar thing will happen to laundromats, hardware stores, and other necessities that can't withstand the increasing rents.

  • guest

    Gristedes is more expensive than Whole Foods. That is a fact. Good bye Gristedes.

  • guest

    Gristedes is always a mess with a general smell. Gristedes produce is terrible. Supermarkets will survive in this city but they may need to take a more of a whole foods approach

  • guest

    Freshdirect >> Food Emporium >> corner bodega >> going hungry >> Gristedes

  • guest

    I do most of my shopping at the Food Emporium and D'Ag in my neighborhood, and hit up Fairway and Whole Foods every few weeks for specialty items that I can't find elsewhere (and for better produce and meat/fish). Every 2 weeks or so I trek to the supermarkets and specialty stores in the Hudson Valley (where my folks still live), since I can get stuff that is fresher and cheaper, even with gas & tolls. I haven't tried FreshDirect yet because I actually enjoy grocery shopping and like to choose my own produce.

  • guest

    How is Fairway a specialty store?

  • also, whole foods and trader joes have better quality perishables as well as health foods that are far cheaper than gristedes, key food, dagastino's, food emporium etc...

  • guest

    Hey Stefan, have you figured out "Don't drink the Kool-Aid" really mean?

  • gristedes should be closing. they have, for over 40 years, been over-charging customers. fck them!

  • guest

    I go out of my way to avoid Gristedes.

  • MaiaW

    Two things. First, I don't think your poll is really valid...most of the people I know in the city shop at more than one grocery store, not just one. I, for one, am definitely willing to shell out the bucks at a more gourmet store for produce and/or getting ready for a party. But I'd guess most people mostly also use their local supermarket for the basics. (By the way, I'm not sure why you consider Garden of Eden a "neighborhood chain" rather than "gourmet"...the stuff that place sells is definitely on a par with Citarella at least, if not Whole Foods.) My second point is that there's also a LOT to be said about presentation. I used to live in between a Gristedes and a Food Emporium on the Upper East Side. The former was slightly cheaper but it looked and felt cheaper shopping there, too, so I would almost always go to the Food Emporium instead. I think places like Gristedes need to understand that the shopping experience is what they're selling, not just the food, and that to spend a little on ambiance would probably help their cause a lot. Obviously, rents are going up - they are for everyone - but they are going up for everyone, so that can't be the only reason they're starting not to do well!

  • guest

    Margins in grocery stores have always been thin. I don't know where this 10% margin comes from.



    I shop everywhere: grocery stores, specialty stores like Zabars, and even Duane Reade and CVS if they have stuff like cereal on sale.

  • S.D.

    Other than the above list, We buy lots of Stuff from China Town before coming home.

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