Sales slump wears on Big Apple distributors

01/22/2010 01:33:52 PM
Doug Ohlemeier

NEW YORK — In the Big Apple, produce sales, like other items in the consumer economy, aren’t selling as well as they have in the past.

Wholesalers blame the slump on the dragging economy.

“Everyone’s complaining that it’s not as busy as last year,” said Alfie Badalamenti, vice president of Coosemans New York Inc. “There’s no business and the restaurants aren’t as busy. New York City is definitely feeling the economic pinch.” 


Doug Ohlemeier

Shoppers view produce in Queens at one of the New York's many produce markets. New York-based produce wholesalers say sales have fallen.

While produce sales in January and February are usually slower than normal, Badalamenti said he fears the months will be much quieter than normal.

“There are a lot of people collecting unemployment that have to get jobs after a year of being unemployed,” Badalamenti said. “I feel the economy will get worse unless they try to boom it up.”

Purchasing habits are changing for retail and foodservice customers.

Changing buying habits

“No one is speculating on anything. They’re just buying what they need,” said Richard Cochran, president of Robert T. Cochran & Co. Inc.  “Everyone is waiting for the other shoe to drop in the whole economy.”

Cochran said every customer is probably down 10% or more on their orders.

A smaller retail chain operator, Jay Kim, owner of South Salem-based Greenwich Produce Inc., buys produce from the market. He said he has noticed slower purchasing.

“Sales used to be good, but not anymore. It’s all over,” he said. “Buyers in the market are all complaining, but there’s nothing they can do.”

Distributors in the surrounding suburban areas worry about the street business, the independently- owned restaurants, caterers, delicatessens, bagel stores and small-scale business and industry accounts.

“Street business is still a piece I’m very concerned about,” said Joel Panagakos, executive vice president of J. Kings Foodservice Professionals Inc., Holtsville, “They are struggling. They really are. People are going to a number of different distributors, and price is very much on their minds.”


Doug Ohlemeier

Workers move boxes of produce on the Hunts Point Terminal Market.

Panagakos said J. Kings is responding by trying to offer the products that provide the distributors the greatest value.

High unemployment

A high 10% unemployment rate worries distributors such as Jeff Young, buyer for A&J Produce Corp.

“People are just treading water now,” he said. “The country is still in a recession. Everyone says business is slow. Whenever you talk with anyone, they ask you when business will pick up. That has been a common thread through this last year. Everyone is slow.”

Matthew D’Arrigo, vice president of D’Arrigo Bros. Co. of New York Inc., and co-chairman of the Hunts Point Terminal Market, said in challenging economic times it’s good to be a company with a long history to help withstand the dips in business.

He said slow-pays have become more common.

“To me, slow-pays are the rule, not the exception now that you have slower money,” D’Arrigo said. “Another thing you have to cope with is your customers are feeling the pinch, and you have to plan on that. I have no complaints about the position we are in. We are in a very good industry compared to many other industries. We feel very fortunate to be in the produce industry because of its fast and dynamic nature and the absolute necessity of having a product that is constantly consumed.”

Credit concerns

Wholesalers like Baldor Specialty Foods Inc. are paying more attention to the credit they extend to their customers.

“I could double my business tomorrow if I extended the terms and gave higher credit limits,” said Mike Muzyk, president. “But that’s not very strong business practice during this time. We have reduced some of the credit limits on some customers because we are a bit nervous about the financial stability of some in this industry. We want to limit our exposure to those clients who we aren’t certain about their future.”

Some suburban-based distributors say sales are beginning to rebound a little.

“Up until the middle of October, we struggled big time,” said Joe Granata, director of produce for RLB Food Distributors LP, West Caldwell, N.J. “Our numbers have been running better but last year our numbers were so bad that they had to be better. We went through weeks in December (2008) that were absolutely brutal. Things are not near where we want them to be, but it has turned around.”



Comments (0) Leave a comment 

Name
e-Mail (required)
Location

Comment:

characters left

Feedback Form
Leads to Insight