Gristedes Owner Predicts Rents Will Drive Supermarkets Out of NYC

No 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

Contact the author of this article or email tips@gothamist.com with further questions, comments or tips.

By Jen Chung in News on September 15, 2007 5:35 PM

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.

ed_Extinct

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.