May 24, 2018

Did the Rise of the Independents Come too Quickly?

New York…The rapid rise of the kosher independent supermarkets around the country and particularly in the East was the dominant factor in the growth of the kosher food market over most of this decade. In a series of interviews by Kosher Today with distributors, manufacturers and retailers, there is apparently a growing concern that this “explosion” of independent stores, as some called it, may have come too quickly, and said several, may still result in a “shakeout.” At least one distributor predicted the closure of a handful of stores by the end of 2018. While the ambitious entrepreneurs were betting on the changed demographics which particularly plotted the growth of the core kosher consumers, increased competition, including the entry of the Bingo discount concept, actually forced some independents to cut back on their projections. Most of the industry people cited Lakewood as an example where no less than 5 large independents compete for the business of an estimated 70,000 people, in addition to several smaller grocers, nearby supermarkets and discount chains. In addition, Bingo is said to be planning its second large store (the first is in Boro Park) in the area. While such studies as Pew project continued growth of the Orthodox Jewish population, at least some of that growth may actually be a shift in population in various communities. According to the Orthodox Jewish Public Affairs Council, Brooklyn with 81,350 students in Jewish day schools is down by 1,184 from 82,534 last year and is down from 82,481 students two years. By comparison, Rockland County with 27,859 students is up by 1,888 from 25,971 students last year and is up from 24,839 students two years ago.

The industry officials said that while the rapid growth of the independents was a boon for their overall sales, they were concerned that some of the independents may be stretched “very thin,” often delaying payment. While there was some disagreement as to the extent of the volatility in the world of the independents, there was unanimity that the customer is certainly the beneficiary of retail choices they could only dream about years ago. What happens next remains to be seen.