President and CEO of Stew Leonard's, Steward Leonard Jr., Talks Consumer Spending and War Impact
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What is the main topic discussed in this episode?
Bloomberg Audio Studios Podcasts, radio, news. Well, rising prices for staples like food due to tariffs and out gas following the start of the Iran war are certainly things are top of mind for folks who are going anywhere right now. So let's check in with Stuart Leonard Jr. He's president and CEO of John Tucker's favorite market, Stu Leonard's, and he joins us from Connecticut. Stu, it's great to speak with you. No one likes having to raise prices, but at some point they need to. How have you been
What impact do rising oil prices and the war have on consumer spending?
What's been your strategy when it comes to price increases because of higher costs on your end?
Well, you know, we're in the fresh food business, basically. And, you know, it ebbs and flows all the time. You know, it could be bad weather in some places. There could be a drought out in the Midwest. And that all affects food prices. So one of the things, look, we operate on very thin margins in the food business, all supermarkets, too. And, you know, when something like this comes up, like the tariffs, when they hit us, now we got the fuel surcharges that are hitting us right now. We try to just eat it for as long as we can, you know, and just hold on. I grew up in this business. I've been doing it 50 years. I grew up on the floor here and I got to think about the people pushing the shopping carts around the store.
You know, I want to think like a customer. And they're fed up right now with any, their food bill right now is up to their chin. You know, so what can I do? I got to hold it as long as I can, but I can't do it forever. Otherwise, I'll start losing money.
Stu, I mean, based upon your experience so far this year with the higher tariffs, Ken, what's, I know you try to work with your suppliers to kind of share the cost here. How is it kind of shaken out? How much has been borne by you, the retailer, by maybe your suppliers, and then maybe by the consumer?
Well, I think your opening comment that you had today, nobody wins when you raise price. Okay, the suppliers don't win. The ranchers don't win. The farmers, Stu Leonard doesn't win. So everybody holds off.
How does Stew Leonard's manage price increases in response to higher costs?
Usually what we end up probably doing, we're starting to get the fuel surcharges heading up right now. We're bringing fresh product in from the Midwest and, you know, berries and produce from Florida and California. You know, and those... Fuel costs. I mean, the guy's got to fill his truck up to get in here. So those costs have been going up. Usually what we can do is say, we'll split it with you. That's the first step. So that's what we're probably going to start doing. And then hopefully, the way I feel, this is going to be short term. I hope the government is going to get this all worked out with the flow of oil. And I hope energy prices will be coming down in the future.
Yeah, well, I think that's something we all hope for. Of course, we also know that the Supreme Court struck down President Trump's tariffs. And I'm wondering where that leaves you, Stu Leonards, and where that leaves prices on those goods where they had gone up because of tariffs.
Hey, you know what? I think that's above my peg right there. You know, we're a family business here in the Metro New York area. I don't really know how they're going to rebate people. I know Costco was suing the government. And I think our wine supplier just wrote that there's some money coming back from the tariffs on the liquor end of the business. But I don't really know how that's going to work out. like getting a refund check, I guess, if it happens.
Hey, Stu, one of the areas that seems to be a persistent area of inflation for shoppers is the cost of beef. And, you know, we've been told that the actual cattle herd in this country is at a very low level. What's your understanding of that market?
And look what I have for you right here. I brought one of these. How's that look? Oh, there we go. The tomahawk. That's what our ranchers, when they come back from the Midwest, that's what they want to eat. It's a ribeye tomahawk steak, and they're great. But you know what? Right now, there is a 50-year...
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Chapters
4 chapters
1
What is the main topic discussed in this episode?
0:02–0:34
2
What impact do rising oil prices and the war have on consumer spending?
0:34–2:20
3
How does Stew Leonard's manage price increases in response to higher costs?
2:20–5:04
4
What strategies does Stew Leonard's use to cope with food price fluctuations?
5:04–6:06
Speakers
2 identifiedMore from Bloomberg Talks
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