Hold the Mayo! The Future of Grocery Prices in the West Village

By W. Russell Neuman
I know I should, but I don’t pay a lot of attention to price tags in stores. I should also keep track of sale items and I don’t do that either. But when I picked up a jar of Hellmann’s Mayonnaise at a chain grocery store/supermarket in the West Village recently, I had to say, “Wait a minute!”
I somehow remembered paying about half that amount in a similar grocery store across the river, in New Jersey. I know real estate prices are particularly high in these parts, but a 100% markup? Really? What is doubly puzzling is that, despite these prices, the grocery stores in the area seem to be in some sort of financial meltdown.
Mrs. Green’s on Hudson Street survived only 14 months before shutting down. D’Agostino hit a cash crunch last year, and after a few weeks of nearly bare shelves, was saved by a last-minute investment from John Catsimatidis’ Red Apple chain, which also manages the Gristedes stores in town. There are newspaper reports that Fairway, Whole Foods, and Trader Joe’s are also struggling financially.
Mayo is my measure. Some folks order a particular dish like Pad Thai to compare the true quality of Thai restaurants. Connoisseurs of night club balladeers might request a classic song like “New York, New York” to test the mettle of an aspiring songster. For me, the price of a standard 30-ounce jar of Hellmann’s “Bring Out the Best” Real Mayonnaise is my metric for verifying the grocers.
So, I’m in the aisle holding the mayo jar with one hand and scratching my head with the other. When I’m at the New Jersey Shore in the summer, Hellmann’s is $3.99; here it is $7.99. That could represent a $4.00 profit on this single non-perishable staple. What are these guys spending that $4.00 on? I doubt that it is due to higher labor costs in New York City.
In New York, they pay grocery associates an average of $10.51 per hour compared to $11.33 in New Jersey (the hourly rate in the West Village could be somewhat higher because the older grocery chains tend to be unionized). True, commercial rents are higher here, typically $200.00 annually per square foot compared to $40.00, and often lower in New Jersey. The national average in grocery sales is $500.00 per square foot, so I remain puzzled about why the local folks are struggling.
Mayor de Blasio remains adamantly opposed to Wal-Mart and other “big box” stores setting foot in Manhattan. I understand his concern about wages. But what about the prices Manhattanites pay for food given artificially limited competition?
For the record, I’ve compiled the latest sampling of local Hellmann’s sticker prices. Some stores carry only the 15-ounce size so prices per ounce tend to be even higher. Clearly, the direct delivery guys are making a point about competitive pricing and free delivery. So, “big box” prices are available in the Village online, just no “big box.” Yet.

Curious about Hellmann’s? 
Hellmann’s was invented right here in New York, at 490 Columbus Avenue, by Richard Hellmann in 1905. Hellmann had arrived in the states from Germany only a few years before. He made his own mayo within his deli. Customers loved it and he would sell it to them in small amounts and to other delis in bulk. Hellmann’s recipe continued to win culinary awards and the business expanded into major manufacturing; it was ultimately acquired by mega-giant Unilever. Pretty much the same product (just slightly more lemony) is sold with the same blue ribbon label as “Best Foods Real Mayonnaise” west of the Rockies. Now you know. 

Leave a Reply