Kosher Retailers Say Recession Still Curtailing Buying for Many

Posted by Menachem Lubinsky on April 26, 2010 under Kosher Companies, Recession | View Comments

By Menachem Lubinsky

New York…The recession continues to have a significant impact on kosher food sales despite a perception that kosher food is “recession-proof,” Kosher Today has learned. In dozens of interviews with industry officials, it became clear that the buying habits of kosher consumers was markedly different this past Passover than it was just two or three years ago. “People are being squeezed on all sides” said a Boro Park retailer, “and they are more price conscious than ever.” He said that he observed that more customers were buying from lists rather than just impulse buying or walking up and down the aisles and picking up items. In nearby Flatbush where Pomegranate has set a new standard in shopping for kosher foods, there were many customers who now shop in multiple stores. A kosher blogger wrote: “I have learned to buy items at Pomegranate that cost about the same everywhere (i.e. many dairy products) and to save by buying at places like COSTCO, Paperific and the Kolel store.” The retailers say they are constantly reminded by customers of a breadwinner that has lost their job. Stores that recorded double-digit growth in 2008, said they only did 2% – 3% better on sales during Passover 2010 than they did in 2009. The same seemed to be true in kosher wines where many customers shunned the more expensive wines they routinely bought in 2008. The number of people relying on help from such charities as Met Council on Jewish Poverty, Tomchei Shabbos and Keren Aniyim as well as similar organizations in cities outside of New York also increased significantly.

Despite this disturbing development for the kosher food industry, sources say,  the industry as a whole seems to have weathered the “pockets of downturns” well. They pointed to making up some of the slack with volume. “Natural growth has always helped the industry even in a down economy,” said one kosher food manufacturer. New items also continue to drive sales as younger kosher customers continue to show a strong desire to try new and interesting foods. While there is talk of a recovery, in the kosher food industry the recession still continues to take its toll.

Flatbush Food Establishments Contest “Book” Theory of Store Closure

Posted by Menachem Lubinsky on February 22, 2010 under Kosher, Kosher Stores | View Comments

By Menachem Lubinsky

Brooklyn…A Kosher Today story that the closure of Fruit Palace on Avenue J was due to the mounting debt of credit extended to customers in what is known as the “book,” was immediately challenged by local merchants, investors, and at least one distributor. The culprit, say the food officials, is Pomegranate, which has sharply curtailed traffic on the Flatbush commercial strip. One source told Kosher Today that most of the food stores “on the Avenue” were down between 30% – 40% since the large gourmet upscale supermarket opened only several blocks away in August 2008. An investor with Food Palace told Kosher Today that “orders on a typical Friday were down by nearly 40% in most of the food stores on Avenue J.” Yet, one source also noted that the book may have been a factor, noting that one account at Fruit Palace owed the store more than $70,000. A source close to nearby Blue Ribbon said that his book totaled more than $200,000. Another Flatbush store put his number at “somewhere between $140,000 – $160,000. But the food sources say that the book is not the reason for the doldrums at some of the stores as those payables have always existed. “It is clearly Pomegranate that has simply cut traffic on the avenue significantly,” said one source that has been on the avenue for over a quarter of a century.  He added: “Look, we are trying to help our customers and when you wrote about the book, you neglected to mention how much free food we all give away. That’s what hurts so much. We’ve done so much for this community and suddenly many of them are gone, just like that.”