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Gristedes Owner Predicts Rents Will Drive Supermarkets Out of NYC
By
Jen Chung
Published Sep 15, 2007
Modified Mar 7, 2008
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By
Jen Chung
Published Sep 15, 2007
Modified Mar 7, 2008
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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
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Jen Chung
Jen Chung is a former WNYC and Gothamist editor.
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