Where Did NYC Supermarkets Go?

PDF Format: nyags-where-did-nyc-supermarkets-go-11-4-2016

Where Did NYC Supermarkets Go?

To paraphrase Peter, Paul, and Mary: “Gone to graveyards everyone, Oh, when will they ever learn? (http://www.lyricsfreak.com/p/peter+paul+mary/where+have+all+the+flowers+gone_20107752.html)

Proposal: The need for an aggressive public policy of supermarket growth and retention

The NY Times is out this morning with a story that they periodically come back to: the phenomenon of supermarkets disappearing in NYC:

Many of the city’s grocers, large and small, have struggled to survive. Some have succumbed to high rent, narrow profit margins and increased competition from upscale supermarkets, online grocers and drugstore chains that have expanded their wares to include grocery items.

“It’s depressing,” said Charles Platkin, the executive director of the New York City Food Policy Center at Hunter College. “When a supermarket in your area closes, it feels like you’re moving backward.” (http://mobile.nytimes.com/2016/11/06/realestate/new-york-city-small-supermarkets-are-closing.html?_r=0&referer=)

Nine years ago, the Times weighed in similar fashion—but with more of an emphasis on public health:

A continuing decline in the number of neighborhood supermarkets has made it harder for millions of New Yorkers to find fresh and affordable food within walking distance of their homes, according to a recent city study. The dearth of nearby supermarkets is most severe in minority and poor neighborhoods already beset by obesity, diabetes and heart disease.” (http://www.nytimes.com/2008/05/05/nyregion/05citywide.html?ref=nyregion)

But, while the disappearance of neighborhood supermarkets has been documented extensively for the past decade and a half, the City’s response—in the middle of a health crisis in many city neighborhoods—has been nothing short of anemic.

The supermarket gap was recognized in a lengthy Department of City Planning study in 2008 (http://www.nyc.gov/html/misc/pdf/going_to_market.pdf):

“Why should we be concerned about neighborhood grocery stores and supermarkets?

  • § Improve quality of life
  • § Improve property values
  • § Create jobs
  • § Serve as retail anchors, attracting foot traffic and complementary retail.”

The report goes on to emphasize the public health benefits underlying the need to preserve and protect neighborhood supermarkets:

–         High rates of diabetes

–         High rates of obesity

–         Low consumption of fresh fruits and vegetables

–         Low share of fresh food retail

In response, the City initiated its “Fresh” program to promote new supermarket development. But in its eagerness to add new markets through tax incentives and abatements, the planners failed to address the tax and regulatory reasons for the loss of the markets in the first place. (http://www.nycedc.com/program/food-retail-expansion-support-health-fresh)

 

It is logical to assume that if stores were leaving many City neighborhoods, then certain underlying business factors must have contributed to their destabilization. Adding new stores when these underlying factors haven’t been addressed, then, was likely to exacerbate the disappearing supermarket trend—and that has been borne out of the past 8 years. (http://ny.curbed.com/maps/map-nyc-grocery-stores-disappearing)

What should be clear is that NYC is losing supermarkets; and that good public policy must address the underlying causes of the disappearance. What we need now is an aggressive policy of supermarket growth and retention.

Real Estate tax abatements: Supermarkets as public health facilities

The City should look to create a real estate tax abatement program that would treat neighborhood markets as public health facilities. By doing so—and the abatement must be significant—the City is acknowledging that these retail outlets are essential City services, integral to neighborhood quality of life, and important retail anchors in commercial strips all over the city.

This aggressive tax relief is even more justified in the face of the City Council’s eagerness to increase the number of food vendors on city streets—especially produce vendors that establish locations right in front of the very same markets that the planners claim we are trying to preserve.

Gristedes’ owner, John Catsimatidis, lays out the entire picture:

The rent is too high — nobody is making ‘money money,’ ” said Mr. Catsimatidis, a billionaire who started in the grocery business 48 years ago. According to Mr. Catsimatidis, Gristedes stores fare better than their peers partly because they are part of his Red Apple Group, a conglomerate that operates, among other things, an oil refinery. In the 1970s, he said, rent consumed 2 percent of sales; now it’s 10 percent to 12 percent.

Competition is fierce, and not just from Whole Foods. Even those street vendors parked on the sidewalk a few steps away from the grocery store cut into profits, selling items like bananas and strawberries for a fraction of what they cost inside.”

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