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Small grocers say it isn't kosher for the big chains to muscle in



Published: Wed, January 5, 2005 @ 12:00 a.m.



Large companies are seeking competitive advantage by catering to specialty groups.

WASHINGTON POST

CHICAGO -- The sign in the window of the kosher Chinese restaurant looks forlorn. Hand-lettered and slightly faded from the strong winter sun, it is a plea to customers to remain steadfast against a powerful invader.

"Please patronize the real jewels of the community. The heimische owned groceries and restaurants," the sign reads. Above it, inside a thin circle is the word Jewel. A diagonal line runs through it, the international symbol of opposition.

Jewel is a well-established supermarket chain that caused no heartache and invited no wrath until a couple of months ago, when it suddenly bought a huge billboard on Chicago's North Side to announce the opening of a gleaming kosher food department at a nearby store.

To Jewel and its parent Albertsons, the move was a straightforward play for customers and profits.

To the family-owned kosher shops along Devon Avenue and in nearby Skokie, it was a threat and an affront.

"I've definitely lost a fairly significant percentage of business," said Chayim Knobloch, proprietor of Kol Tuv Kosher Foods, a store and deli located across the street from the billboard. "I've begun trimming expenses and staff."

A throwback

Knobloch advertises his kosher grocery, a throwback with narrow aisles packed with goods from wine to tablecloths, as "The Heimische Store," invoking a Yiddish word that suggests home and a warm hearth. When it comes to prices, he says, he cannot win.

The struggle being played out in north Chicago is part of a larger play for Jewish shoppers -- and the growing ethnic food market -- nationwide. Large companies including Albertsons, Wal-Mart, Safeway and Costco are seeking competitive advantage in a crowded sales sector by catering to specialty audiences.

Roughly 18,000 supermarkets carry products prepared according to Orthodox Judaism's dietary code, fueling a market that has been growing by 12 to 15 percent for nearly a decade, according to Kosher Today, an industry trade paper.

Yakov Yarmove, the Albertsons executive who is overseeing Jewel's kosher project, said it's all about creating a "point of differentiation to make sure we've got a competitive edge. So our stores aren't cookie-cutter."

"Years ago, where the Wal-Marts, Costcos, Targets and Kmarts of the world focused on general merchandise, they're now getting into the food business in a very strong way," Yarmove said. "We're not trying to hurt a local business or a local community, but at the same time we're listening to the local community and their needs."

Shortly after Jewel remodeled its store in September, an influential group of rabbis tried to shore up the kosher stores by mailing an appeal to thousands of Jews, urging them to stick together and shop at the smaller stores that have long served the community.

Titled "An Open Letter to the Community," the rabbis' missive said other cities had seen kosher stores forced out of business by supermarket chains. They objected to the big competitors' "aggressive manner" and said they "strongly encourage all Jews" to buy from all-kosher stores.

Buying power

A 27-year-old kosher food distributor said he won't deal with Albertsons and he won't shop at Jewel, no matter how enticing its shelves and counters. He said big stores often have the buying power to go directly to the producer and cut out the middleman, hurting long-standing businesses even as they win customers with lower prices.

"It kills all my customers. The stores are being hurt," said the man named Joe, who gave only his first name for fear of a backlash against his employer. "We can hope for the best, but they move a lot of product. Money talks."

Devon Avenue, a babel of tongues and nationalities running west from Lake Michigan, has been shedding Jewish shops, bakeries and restaurants since long before Jewel opened its kosher emporium. Narrow storefronts that once housed kosher butchers are now as likely to be an Indian grocery, an Afghan restaurant or a Russian medical supply company.

The reasons for this are as varied as shifting demographics and changing consumer habits. The business reasons are as natural as the dynamics of an ancient bazaar.

"We live in a free-market society. People will go to whoever serves them best," said Don Nussbaum, who teaches at a nearby Orthodox boarding school and works part time at Rosenblum's World of Judaica on Devon. "If that takes away from local business, then maybe the local businesses aren't doing their best.

"True, Albertsons is the behemoth, goliath, leviathan that's coming into town," he continued. "Somebody's going to get pushed out, and that's sad."

Rosenblum's opened in Chicago in 1941 and advertises itself as "the oldest and largest full-service Jewish bookstore in the Midwest." It, too, is perking up to the competition from Jewel, alarmed by the deep discounts offered by Jewel on tableware and DVDs of "The Adventures of Agent Emes."

"We have to use it as an opportunity to improve our relationship with customers," Sandy Kanter said as she worked on an order for nine dozen personalized yarmulkes for a June bar mitzvah. "If you walk into Jewel and look a little bit lost, someone will come up and offer to help you."

The reality, she said, is that people will shop at Jewel. Already in the supermarket to buy toilet paper and detergent, they'll pick up some kosher sushi -- "and fried chicken, which is really good."

Revelation

For shoppers accustomed to the crowded aisles and serendipity of local kosher stores, the Jewel on Howard Avenue, the border between Chicago and the town of Evanston, is a revelation.

"Isn't it incredible?" one woman said to another as they marveled at the display, from Empire chicken to Tirat Zvi honey-glazed turkey breast to kugel and frozen pizza. And fresh sushi, of course. Always the sushi.

"It's about time," said Sheryl Palmer, inspecting the kosher selection for the first time. "People like good quality food and don't have time to make it. They're going to come where it's kosher and it's a little cheaper."

Wendy Margolin, who lives in West Rogers Park, was more ambivalent. She worries that Jewel will drive away its more vulnerable competition. She also believes that something more important than profits are at stake.

"I try and maintain my old shopping habits," Margolin said. "We have a responsibility."

Back at Kol Tuv, Knobloch closed his books one day and headed into the frigid twilight, on his way to synagogue. He said his loyal customers were behind him in the sales battle and pointed to Rabbi David Maler.

Maler said he enjoys shopping at Kol Tuv for the sense of fellowship. Then, cupping his hand over his mouth, he admitted that he has started to buy kosher goods at Jewel. "The sale stuff," he said sotto voce.

"I asked my local rabbi," Maler said. "He said, 'The sale products -- you should give yourself a break.'"




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