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FreeRepublic , LLC PO BOX 9771 FRESNO, CA 93794
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Posted on 01/18/2003 5:49:55 AM PST by Archangelsk
Who Moved My Arugula?
By ROB KAUFELT
After graduating from college in the late 1960's, unclear about my future, I drifted into the family supermarket business in New Jersey. From Day One, I bugged my father and uncle about all the things they were doing wrong. In response, they sent me to an old-fashioned supermarket training program.
The course did not have its intended effect. Most of what I learned came from my roommate, who arrived in a Mercedes convertible with golf clubs in the trunk (I had a Pinto). He regaled me with his vision of a new type of store, one filled with fabulous food and service. It was the antithesis of the boring, sterile markets we all ran. But it was exactly like Balducci's, the Greenwich Village institution that shut its doors this month after more than a half-century in business.
Inspired by my roommate, I began to make changes in our stores, stocking stem berries, cored pineapple and arugula. We added bakeries, fish counters with open-ice displays, custom butchers and prepared foods cooked by store chefs.
Sales and profits took off and the company's stock went through the roof. But eventually, I left. The supermarket business was changing: consolidation was driving many family-owned chains, including our own, to sell out to big, international corporations. The Food Emporiums went to A.&P., and the grand old names like Daitch, Bohack and others went into the great supermarket dustbin of history.
But somehow Balducci's, the store that influenced so many in my generation, remained. It was the model we had studied and copied. The Zabar family ran a fine shop, but their delicatessen was too specialized; Dean & DeLuca, the newcomer, was too hip. Andy Balducci, however, invented the "gourmet" store, and he and his father, whose store he transformed, were genuine grocers.
But family businesses tend toward messy breakups, and so it was with Balducci's. In 1999, weakened by squabbles, the store was purchased by Sutton Place Gourmet, once itself a brilliant upstart in Washington, but long since reduced by corporate management to mediocrity. In no time at all, the venture capitalists running Sutton Place managed to lose $23 million in the dot-com and mail order business, an area Balducci's had pioneered with its catalog years before.
Within two years, sales in Balducci's Greenwich Village store dropped by more than half, to less than $10 million. Its new owners began to peddle the business, but found no takers. Finally, it came down to real estate. Balducci's owned its own space, which became worth more than the business itself. The real estate was sold and the shop closed.
I wasn't surprised. A couple of years ago, my dad came into the small cheese shop I had purchased in Greenwich Village. He had with him a guy who, 20 years earlier, had been one of our deli managers. Since then, he had gone on to a successful career in the grocery business. Now, he handed me his card: he was the new chief executive of Sutton Place-Balducci's. I congratulated him, and offered him my help. He wouldn't be needing it, he said. He wasn't thinking local, he was thinking national. A plan was in the works to create a chain of Balducci's.
I told him the specialty food business was not the supermarket business. There are important differences, not least of which is that supermarkets are driven by efficiency, while specialty stores are about excellence of product and knowledgeable service. What's more, New York City is unlike any other market in the country. He didn't seem to understand what I was talking about. Or maybe he just didn't care.
The venture capitalists who run Sutton Place don't seem too unhappy with the way things have turned out. After all, they managed to recoup much of their investment. One of the owners even told me that the Balducci's deal wasn't all that big anyway.
I couldn't disagree more.
With Balducci's gone the only specialty food store left is the shrine to all that is epicurean - Zabar's.
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FreeRepublic , LLC PO BOX 9771 FRESNO, CA 93794
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What, the part where the fellow improves the grocery store's product line, and profits go through the roof? Or the part where people with no knowledge of the market come in and destroy a brand?
Looks like capitalism the way it ought to work- you provide better service/product, you make more money. You ignore the market, you die.
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