East Harlem – As bodega business goes, so goes business in East Harlem.
Bodegas, urban convenience stores that sell items such as candy and cold medicine, are East Harlem's economic heartbeat. Despite recent news that the recession is over, bodega owners and customers say its pulse has slowed to a murmur. Sales are down as much as 50 percent at some bodegas as customers spend less, operational costs climb and new competitors vie for business in El Barrio.
"The government is saying it's getting better," said Enrique Minaya, owner of Minaya deli-grocery on 116th Street. "But I don't see it. Believe me."
Minaya, perched behind a floor-to-ceiling plexiglass counter filled with lottery tickets and toiletries, said customers are spending less, illustrating his point by holding up a single can of beer set down on the counter by a customer. Each customer spent about $6 per visit two years ago; now they spend $3 to $4, he estimated.
In East Harlem, bodegas like Minaya's dot almost every corner. The New York City Department of Health & Mental Hygiene found that bodegas are the most common food stores in East and Central Harlem, according to a 2007 report. Bodegas also play a key economic role, as described by Russell Leigh Sharman in his 2006 book, The Tenants of East Harlem.
"But the true mainstay of the East Harlem economy, the barrio equivalent of the general store, is the corner bodega. Entry-level operations in the formal economy, bodegas in East Harlem, as elsewhere in New York, are the last vestige of the mom-and-pop store in the homogenized city."
The Bodega Association of the United States, headquartered in Manhattan, has 10,000 members in New York City, according to President Ramon Murphy. He estimated there are about 400 in East Harlem.
Less to spend
Murphy, who owns Red Apple Deli-Market, a bodega, said he's noticed a significant drop in spending over the last couple of years.
"Listen, East Harlem is struggling," Murphy said. "These people have 50 percent of the budget they used to have. They're coming, but spending a lot less."
East Harlem residents agree that times are tough, despite news from the National Bureau of Economic Research that found the recession, which started in late 2007, actually ended in June of 2009. The U.S. Census Bureau estimates that in 2008, the most recent year for which statistics were available, 26.6 percent of all families in Manhattan community board 11, which includes East Harlem, had incomes that registered below the poverty level, a 3.5 percent increase from 2007.
John Ruiz, a regular customer at Smashiess Deli & and Grocery on 104th Street, is spending less than he did two years ago. "If you were eating out four days a week, you're eating out once now," said Ruiz.
"It's worse here," said Phil Perry, a regular patron at Futuro deli grocery on 122nd Street and Second Avenue. He had just bought a package of pork skins for 99 cents; six months ago he said it cost 50 cents.
Bets and benefits
Some bodega employees are noticing further indicators of tough economic times: an increase in customers buying lottery tickets.
Lottery tickets are the most popular item at Quick Buy Deli/Grocery, a bodega on 107th Street whose counter is filled with brightly colored scratch-off tickets and calling cards. Manager Shilpi Shilpi estimated that she had sold only $120 in merchandise on a recent afternoon; $20 worth of food and beverages and $100 in lottery tickets.
"There are a lot of people playing the lotto around here lately," said William Gomez, a customer at BANI Grocery on Lexington Avenue between 97th and 98th streets.
Why are lottery tickets so popular given the economic downturn? "A dollar's a dream," said Gomez, adding that he occasionally plays.
Another sign of a slow-beating economy is the increasing number of customers paying with food stamps, said owners.
"Business in cash is slow," said Sharhan Muhammad at Express Grill Deli on Lexington Avenue between 123rd and 124th streets. The number of people paying with food stamps has increased 75 percent since 2008, estimated Muhammad.
The City's Department of Planning reports that 44,704 people in Manhattan community board 11 received food stamps in fiscal 2010, a 39 percent increase from 2008. Most bodegas in East Harlem feature signs prominently advertising that they accept food stamps.
"So many people have come in the last year with food stamps," said Murphy. "They lost their job and have no money. But still they come back with food stamps to buy bread and milk."
Chain stores cut in
In addition to East Harlem's high jobless rate, bodega owners said new competitors are cutting into their sales.
"Customers go to Costco," said Manuel Soto, owner of Rosario Deli Grocery on First Avenue between 118th and 119th streets.
Costco is a part of the East River Plaza, a 500,000-square-foot shopping center that opened last November and includes a handful of major retailers, including a new Target store.
Soto estimated business was down 50 percent since East River Plaza opened. "Customers only buy cheap stuff, like candy, rice and beans," he said, adding that he sells two to three bottles of laundry detergent a day compared to moving a case per day before Costco was in the neighborhood.
"It was already impacted by the recession, but when [Costco] opened, everything went down," said Ali Alhalmi, owner of M.S.M. Deli & Grocery, located down the street from Rosario on First Avenue. "They can get it wholesale over there. We can't do anything."
M.S.M's sales are down about 25 percent, mostly from items customers now buy in bulk from Costco, such as napkins, toilet paper and groceries, according to Alhalmi.
Alhalmi said former customers who now go to East River Plaza come back to his store to get shopping bags. He started charging 15 cents a bag to make up for lost sales.
Owners' choice: raise prices?
Market 108, a deli-grocery on 108th Street and Third Avenue, also increased the cost of items to make up for lost business. Bananas, the store's most popular fruit, now run 89 cents a pound versus the 49 cents per pound they cost a year ago, according to Mikyung Kim, a cashier.
"This is worse than last year," said Kim, standing idle by a cash register on a slow afternoon. She estimated that the store gets about 100 customers per day compared to 150 per day last year.
Red Apple, on the other hand, pays more for merchandise than it did last year but has not passed it on to customers, said Murphy. The price of milk recently increased 10 cents, from $2.49 to $2.59, but Murphy kept the customer cost the same, at $3.29.
"I'm helping my customers because I need my customers," said Murphy.
Some bodega owners, such as Fernandez Grocery's Luis Pena, are investing more of their own money to boost business. Pena is renovating his 2,700-square-foot location on the corner of 111th Street and Madison Avenue.
"It's very slow," said Pena. "We're trying to change it and restock and sell things."
Foot traffic is down about 50 percent from a year ago, Pena estimated. He said customers have cut down on grocery purchases. Plus, the cost of doing business has gone up; Pena said he pays $7,000 per month for rent and as much as $3,000 per month for electricity – both of which have increased.
As a last-ditch effort, Fernandez is installing a kitchen and deli counter to sell sandwiches and meat. "If you fix the place, people like to see that. They like to see progress," said Pena. "We're hoping we're going to get better business."
More than stores
One thing is clear: East Harlem residents have a special connection to bodegas, and vice versa.
"We support the local mom and pop shops," said Israel Vazquez, Jr., a regular customer at Market 108. "They have a history with us."
Vazquez, chewing coconut candy, also shops at bodegas because he can get his favorite foods from overseas. That and the friendly neighborhood atmosphere.
"You can't go to Pathmark and say, 'Let me get this and I'll pay you tomorrow,'" said Vazquez.
Murphy with Red Apple and the Bodega Association said customers don't often have the budget to buy lots of groceries, but can usually get what they need from a bodega.
"We allow the customer to pick out the items they need and spend the amount they have," Murphy said. "They say, 'Ramon, I'm short 50 cents.' I say, 'okay, get me later.'"
"In the supermarket you can't do that," said Murphy. "We are part of the neighborhood. We work with the neighborhood."