Economy remains a drag on sales in New York

03/19/2013 04:38:00 PM
Doug Ohlemeier

NEW YORK — Although produce may not sell as fast or as much as it used to in the Big Apple, distributors who serve the largest U.S. metropolitan area report consistent produce demand.

“Things are pretty good,” said Matthew D’Arrigo, vice president of D’Arrigo Bros. Co. of New York Inc., and co-chairman of the Hunts Point Terminal Market. “You can’t really characterize this year as being a bad year vs. the past year.”

Distributors continue to struggle

Similar to other cities, New York’s economy remains beleaguered by the extended recession.

“I feel it’s (the economy) moving up a little bit ... but not much,” said Alfie Badalamenti, vice president of Coosemans New York Inc. “But I think this year started much better than last year when we had a lot of people unemployed. We still have the same problems, but it’s not as bad as it was last year.”

Wholesaler Larry Tibbetts, owner of Waterbury, Conn.-based Tibbetts Produce LLC, who buys from the Hunts Point market, said high commodity prices and fewer consumer dollars equate smaller sales.

“Business is lousy,” he said. “We’re having to work a lot harder. Customers aren’t paying like they use to. What I use to put in one truck, it now takes two for the same sales.”

Other wholesalers on the Hunts Point Terminal Market agree business isn’t stellar.

Jeff Young, a fruit buyer for A&J Produce Corp., said high commodity prices that opened the new year challenge sales.

“I would call business flat or just fair,” he said in mid-February. “There are more calls to make just to move packages. People are taking less because prices are high.”

New taxes, surpluses stress sellers

Additional costs and taxes are stressing buyers and sellers, said Ira Nathel, president and vegetable buyer of Nathel & Nathel Inc.

“With this new Social Security tax in place, it’s hurting even more than it was prior to January,” he said. “New York is an expensive place to live, and we pay a lot in taxes.”

Although last year saw fewer supply disruptions, Nathel said that didn’t mean it was an easy year.

“It was tough because there was an overabundance of product,” he said. “It’s very easy for us to get product but not so easy for the guys on the street and in the trenches to sell it and harder to sell it at prices we can make good money.”

Although Hurricane Sandy spared Hunts Point distributors, the storm ravaged the metropolitan region, flooding shoreline businesses, cutting power and closing streets. That hampered distribution to the area’s retail and foodservice customers, some of which never reopened.

Other than during the storm, produce sales remained consistent, said Joe Granata, director of produce for RLB Food Distributors LP, West Caldwell, N.J.

“We had a nice little stretch last year but toward the summer, it tailed off,” he said. “The hurricane flew everything into a flux and it remained a struggle. It dampened sales around Thanksgiving and Christmas and affected everything here, not just the food industry.”

New York’s retail field remains highly competitive.

Paul Kneeland, vice president of produce and floral for Kings Super Markets LLC, Parsippany, N.J., notes new market entrants.

“You’re seeing companies like Fresh Market starting to come in a little more, Wegmans is building more and Whole Foods is building up. It’s a very competitive area ... but no one wants to see the competitive landscape overbuilt either.”

Mike Cochran, sales manager and vice president of Robert T. Cochran & Co. Inc., agreed demand hasn’t been noteworthy.

“Sales are OK and 2012 was kind of a quiet year,” he said. “Demand was just average. But everything was in ample supply last year.”



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