New York City: Growth in a multicultural mecca

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New York City: Growth in a multicultural mecca

By Mark Hamstra - 04/18/2018

As a global center for finance, international trade, media, fashion and entertainment, the New York City metro area works hard to uphold its reputation as the “City that Never Sleeps.”

The greater metropolitan area, the largest in the United States, is home to nearly 24 million people and rising. It is a diverse mix that includes the largest population of foreign-born citizens of any metropolitan area in the world. The demographic makeup is about 52% white, another 21.7% Hispanic or Latino, 15.3% African-American and 9% Asian.

The region’s nominal gross domestic product totaled $1.74 billion in 2017, an increase of 4.7% over 2016, according to the U.S. Commerce Department’s Bureau of Economic Analysis.

According to a report from the New York City comptroller, the economy of New York City itself, which drives the economy for the metro area overall, grew 2.4% in 2017, slightly down from growth of 2.5% in 2016, but ahead of overall U.S. economic growth of 2.3%.

Although the economy pulled back slightly in the fourth quarter, unemployment fell for the full year and wages increased, the comptroller reported. The city added 71,400 private-sector jobs in 2017, after adding 83,600 in 2016. Leading industries adding jobs included education and health services, professional and business services, leisure and hospitality, financial activities, and construction. In contrast, trade, manufacturing and information all lost jobs.

Burt Flickinger, managing director of New York City-based consulting firm Strategic Resource Group, said the chain drug stores in New York City have become grocery destinations, competing with the city’s notoriously high-
priced supermarkets.

“New York is a leading indicator for well-developed urban markets, where it’s tough to get new permits or development sites, that drug stores will increasingly become substitute supermarkets,” he said. “Chain drug stores led by CVS, Rite Aid, as well as Walgreens, are filling the void.”

But that’s not to say drug stores don’t have plenty of competition from both grocers and big-box stores. Among the biggest developments in the area has been the expansion of Rochester, N.Y.-based Wegmans Food Markets into the New York City metro market, with new stores in northern New Jersey and a planned location in Brooklyn that would make it the first Wegmans within city limits. The Brooklyn store had originally been scheduled to open in 2017, but is now scheduled to make its debut sometime later this year.

The food retailing market was roiled by the bankruptcy of A&P/Pathmark in 2015, which saw 25 stores shut down immediately and another 120 sold to rivals — primarily Albertsons, which owns the Acme chain in the Philadelphia area; Stop & Shop, which acquired several Pathmark locations in New York City; and Key Foods, a cooperative that has emerged as one of the largest and fastest-growing retailers in the area.

Keasbey, N.J.-based Wakefern Food, parent of the ShopRite chain, together with its various ShopRite operators, is the dominant food retailer in the market, with close to a quarter of the market share, according to data from Chain Store Guide. Ahold’s Stop & Shop banner tallied about 16.6% of the grocery sales in the market, and Costco another 11.1%.

Although Target has expanded into New York City with a handful of stores, while rival Walmart has none inside the city itself, Walmart still captures a higher grocery market share in the metro area overall, with 2.9%, compared with 1.4% for Target. Minneapolis-based Target continues to expand in the market, however. Last year it opened one of its new small-format stores in Midtown Manhattan, and it has two more on tap for 2018 openings downtown, and more for Brooklyn and Queens in the coming years.