Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: We're thinking about Moral Day, We're thinking about what goes
Speaker 2: into a Memorial Day picnic and celebration. This is happening
Speaker 2: as global food prices climbed to their highest level in
Speaker 2: more than three years, as the Iran War disrupted supply chains.
Speaker 2: You know, we kind of kicked it off talking with
Speaker 2: Stuart and Mike Michael McKee of course about inflation concerns
Speaker 2: and that includes food. So we've got a great voice
Speaker 2: to get into all of this.
Speaker 1: Well, let's head to Stu Leonards in Norwalk, Connecticut, to
Speaker 1: the president's CEO of Stu Leonards. Stue Leonards j Stu
Speaker 1: Leonard Junior joins us. Stu Happy Summer. I just want
Speaker 1: to start off with the question, is is it a
Speaker 1: happy summer at this point? What are sales telling you?
Speaker 1: What are customers telling you?
Speaker 3: Well, first of all, Hi, Carol and Tim hoy doing
Speaker 3: first of all the thing that would make me happier
Speaker 3: if he didn't talk.
Speaker 4: About all the rain and everything that you know that
Speaker 4: that doesn't help our sales.
Speaker 3: We want everybody to go out and barbecue and cook
Speaker 3: jeez burgers out the.
Speaker 2: No.
Speaker 3: But I would say, right now, sales are brisk, customers
Speaker 3: are buying, but they're also complaining.
Speaker 4: Okay, they're complaining about the.
Speaker 3: Prices of food right now, and not only just food,
Speaker 3: but I think they're overall, you know, expenses in their
Speaker 3: normal lives. Like as an example, the other morning, I
Speaker 3: got a phone call from our farmer, tomato farmer in Florida.
Speaker 3: He said, you know, I got some bad news. He said,
Speaker 3: you know, we had a big freeze down here. I
Speaker 3: had to replant my crop. Tomato prices are gonna be up,
Speaker 3: and it's gonna cost me two thousand dollars more to
Speaker 3: send the tractor trailer truck from Florida up to the
Speaker 3: New York area to your stores. And then I come
Speaker 3: down here in the store and I'm talking to a
Speaker 3: customer that just said, hey, I just went and filled
Speaker 3: up my suburban and that cost me fifty dollars more
Speaker 3: and my energy costs and home insurance everybody.
Speaker 4: So I'm stuck in the middle a little bit.
Speaker 3: On one hand, I got to negotiate with this farmer,
Speaker 3: which I did, and we're going to split the cause.
Speaker 3: But I can't raise price. So you know, our prices
Speaker 3: at Stud's compared the last Memorial Day, probably up about
Speaker 3: three percent. They don't need be up like one percent
Speaker 3: if it wasn't for meat, you know. And you asked
Speaker 3: me about some props earlier, but you know here's one
Speaker 3: of our great Oh yeah, this is what you know.
Speaker 3: If you can put this on the Gorilla week and
Speaker 3: you know for a World Day, it's the crowd please but.
Speaker 1: Stu, yeah, it would be. But that's going to set
Speaker 1: you back. I mean, you're talking about a very expensive
Speaker 1: cut of meat there, and you mentioned cheeseburgers earlier. Mike
Speaker 1: McKee talking to us a little earlier and he said,
Speaker 1: you know at some places they're charging you just for
Speaker 1: walking by the meat department. That's how expensive it's gotten.
Speaker 3: Yeah, but you know one thing people are doing is
Speaker 3: they're switching from their protein like you know, that's obviously
Speaker 3: the most expensive thing, and buys a big rip by steak.
Speaker 3: Then you can also go down to just getting some
Speaker 3: plain hamburgers. So you've noticed people switching a little bit.
Speaker 3: They're going to chicken and that's only in the four
Speaker 3: to five dollars a pound range right now, they're going
Speaker 3: to port I've even been doing that instead of having
Speaker 3: a steak, get a nice port chop, and it's like
Speaker 3: ten bucks a pounds less?
Speaker 1: How much how much is that tomahawk that you held
Speaker 1: up per pound?
Speaker 3: Oh gosh, I bet you this will be about seventy dollars. Okay,
Speaker 3: get this, but hey, if you went to a restaurant
Speaker 3: and you ever ordered something like this, you'd just be
Speaker 3: paying one hundred and fifty or at least double or
Speaker 3: more for that page.
Speaker 4: So how many people?
Speaker 2: How many people can eat that chop?
Speaker 1: How much would I eat?
Speaker 2: I know my husband be like, that's mine, But I'm
Speaker 2: just saying two or three people could probably chop into that, right.
Speaker 3: Oh yeah, for sure. You know, it really depends. I mean,
Speaker 3: who's a big meat either. You know, your husband probably
Speaker 3: would love to devour I got a son in law
Speaker 3: who loves me all the time, and he could make
Speaker 3: a big dent in effic so you know.
Speaker 4: But but you.
Speaker 3: Know it's you know, right now you're seeing people really
Speaker 3: just trying to save money. But you know what the
Speaker 3: thing with meat right now is we're at a fifty
Speaker 3: year low and herd price ouse sizes in America. We
Speaker 3: just had some of our ranchers back from the Midwest
Speaker 3: and they're really just saying there's just less cattle.
Speaker 4: And why is that?
Speaker 3: Because you know, it costs them a lot of money
Speaker 3: to feed them because of the droughts and everything that
Speaker 3: happened in the Midwest, and there's not as much you know,
Speaker 3: grass out in the field for the cattle to eat.
Speaker 3: They got to import the corn and the soy and
Speaker 3: al balpa for the cattle to eat.
Speaker 2: So see, that was that was that was a problem.
Speaker 2: I feel like last year too, like we've been talking
Speaker 2: about the herd situation for a while, is that as
Speaker 2: you talk to the ranchers, any of that going to
Speaker 2: get better or easier or.
Speaker 4: No, it's it's getting better now.
Speaker 3: But it takes two years to really grow a little
Speaker 3: cab from like three four hundred pounds when they're born
Speaker 3: all the way up to maybe sixteen hundred pounds when
Speaker 3: they're you know, harvested. So you know it takes time,
Speaker 3: but you're seeing it build right now. It is, it
Speaker 3: is growing. And that's why I'm optimistic about a couple
Speaker 3: of things. One of them is I do think meat
Speaker 3: prices are going to be coming down in the future.
Speaker 3: You know, even our ranchers and everything agree with that.
Speaker 3: And the second thing, I really think fuel prices are
Speaker 3: gonna come down once we get things straightened out in
Speaker 3: the Middle East, which can't be forever.
Speaker 4: I mean, it's got to be resolved at some point.
Speaker 3: So I think we're gonna see some softening on these
Speaker 3: inflation numbers as far as food goes.
Speaker 4: In the future.
Speaker 3: But you know, here, here's what's really interesting, Carol, I
Speaker 3: think you have to break up this inflation and to
Speaker 3: supply and demand and actual cost like from our standpoint,
Speaker 3: Like I'll give you an example. You can go buy
Speaker 3: this watermelon right here by the way. Watermelons are great
Speaker 3: right now. They're really sweet. So here's here's a watermelon.
Speaker 3: You can go buy that. It's about six bucks or
Speaker 3: seven bucks or four you can do this. We can
Speaker 3: have somebody cut these up. The labor for me to
Speaker 3: have a nice lady or guy back there cutting these up.
Speaker 3: It's for us nearly twenty five dollars an hour right
Speaker 3: now without benefits, and that's never going So that's never
Speaker 3: going down. And so there's a couple of things that
Speaker 3: are not going to go down. Labor is not going
Speaker 3: to go down. That's that's inflationary right now. But I
Speaker 3: think the supply and demand of food. Like for instance,
Speaker 3: I always laughed when I would read about people saying
Speaker 3: about egg prices. Eggs had nothing to do with inflation,
Speaker 3: that no government policy or anything. That just had to
Speaker 3: do with the Avian flu. So supply and demand is
Speaker 3: is built in. And if you look, we just had
Speaker 3: some fires out in Simi Valley, as I'm mentioned, the
Speaker 3: cold snapdown in Florida.
Speaker 4: Right, so the droughts out these affect food Trust.
Speaker 2: We got to run. Always love checking you with you, Stu,
Speaker 2: Happy Memorial Day. We're going to keep our fingers crossed
Speaker 2: you don't get rain. Stu Leonard Jr. Of course, President
Speaker 2: CEO of STU Leonard's enjoyed talking with him. We talked
Speaker 2: with his daughter, Blake, who runs their spirits and wines
Speaker 2: business a little bit earlier