October 9, 2018

Collapse of Season’s Resulted from Failed Model and False Hopes

New York…The rapid rise of the independent kosher supermarkets was based on a premise that the stores were located in heavily kosher consumer populated areas and that the stores would more than carry their weight to profitability. Beginning with the decade-old Pomegranate in Flatbush, each of the kosher stores was to be its own profit center. Kosher food industry experts say that the rapid expansion of Season’s well beyond the traditional kosher neighborhoods in New York was a gamble in that the chain was essentially operating in debt with some of the stores not carrying their own weight. The owners of Season’s believed that while operating on borrowed money especially to vendors, each of the stores in such places as Passaic, Baltimore and Cleveland would eventually offset the debt, which obviously did not happen. The few stores that were close to profitably could also not cover those that were underperforming. In addition, the store was still in debt to the original seller of the Supersol stores as well as a bank. Had the model worked, the owners were hoping to sell off a healthy network of independent kosher supermarkets. Instead, there were signs already weeks ago that things were rapidly going south for Season’s. Vendors began to refuse to fill orders and the chain which prided itself as a high-end fully stocked kosher supermarkets was anything but fully stocked, With the noose tightening and the debtors in no mood for further delay, Season’s declared bankruptcy, obviously hoping that a reorganization will eventually carve out a stronger, albeit a smaller Season’s.

Owners of the independents have long spoken of a growing list of challenges, including the latest threat from the super discounter Bingo, set to open in Lakewood next. The Israeli owners of the Osher Ad chain were counting on cutting into the share of the independents and indeed they have, but perhaps not as much as they thought. The retailers recall the early challenges from Bingo when it opened in Boro Park. Some stores initially lost as much as 25% of their business to Bingo, especially on the eve of a major holiday but the “dust settled” and the decline was closer to single digits, they say. As Bingo expanded into many non-food items, they found that their customers stayed the course for food but bought some of the specials in Bingo.