WEBVTT - President and CEO of Stew Leonard's, Steward Leonard Jr.,  Talks Consumer Spending and War Impact

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>Well, rising prices for staples like food due to tariffs

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<v Speaker 2>and out gas following the start of the Iran war

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<v Speaker 2>are certainly things are top of mind for folks who

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<v Speaker 2>are going anywhere right now. So let's check in with

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<v Speaker 2>Stuart Leonard Junior. He's president CEO of John Tucker's favorite market,

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<v Speaker 2>Stu Leonards, and he joins us from Connecticut. Sue, it's

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<v Speaker 2>great to speak with you. No one likes having to

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<v Speaker 2>raise prices, but at some point they need to. How

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<v Speaker 2>have you been What's been your strategy when it comes

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<v Speaker 2>to price increases because of higher cost on your end?

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<v Speaker 1>Well, you know, we're in the fresh food business basically,

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<v Speaker 1>and you know it ebbs and flows all the time.

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<v Speaker 1>You know, it could be bad weather someplaces. There could

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<v Speaker 1>be a drought out in the Midwest, and that all

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<v Speaker 1>effects food prices. So one of the things, Look, we

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<v Speaker 1>operate on very thin margins and the food business all supermarkets,

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<v Speaker 1>and you know, when something like this comes up, like

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<v Speaker 1>the tariffs when they hit us now, we got the

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<v Speaker 1>fuel surcharges that are hitting us right now. We try

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<v Speaker 1>to just eat it for as long as we can.

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<v Speaker 1>You know, just just hold on. I grew up in

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<v Speaker 1>this business. I've been doing it fifty years. I grew

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<v Speaker 1>up on the floor here, and I got to think

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<v Speaker 1>about the people pushing the shopping carts around the store.

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<v Speaker 1>You know, I want to think like a customer, and

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<v Speaker 1>they're fed up right now with any Their food bill

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<v Speaker 1>right now is up up to their chin, you know.

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<v Speaker 1>So what can I do? I got to hold it

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<v Speaker 1>as long as I can, but I can't do it

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<v Speaker 1>forever otherwise I'll start losing money.

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<v Speaker 3>So I mean, based upon your experience so far this

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<v Speaker 3>year with the higher terrorfs ken, what's I know? You

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<v Speaker 3>try to work with your suppliers to kind of share

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<v Speaker 3>the cost here, how's it kind of taking out how

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<v Speaker 3>much has been born by you the retailer, by maybe

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<v Speaker 3>your suppliers, and then maybe by the consumer.

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<v Speaker 1>Well, I think your opening comment that you had today,

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<v Speaker 1>nobody wins when you raise price, Okay, The suppliers don't win,

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<v Speaker 1>The ranchers don't win, the farmers through Londons doesn't. So

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<v Speaker 1>everybody holds off. Usually what we'll end up probably doing.

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<v Speaker 1>We're starting to get some fuel surcharges heading up right now.

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<v Speaker 1>We're bringing fresh product in from the feed from the

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<v Speaker 1>Midwest and you know, berries and produce from from Florida

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<v Speaker 1>and California, you know, and those fuel costs. I mean,

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<v Speaker 1>the guy's got to fill this truck up to get

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<v Speaker 1>it here, So those costs have been going up. Usually

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<v Speaker 1>what we can do and say we'll split it with you,

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<v Speaker 1>that's the first step. So that's what we're probably gonna

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<v Speaker 1>start doing. Uh and then hopefully the way I feel

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<v Speaker 1>this is this is gonna be short term. I hope

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<v Speaker 1>the government is going to get this all worked out

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<v Speaker 1>with the flow of oil, and I hope energy prices

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<v Speaker 1>will be coming down in the future.

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<v Speaker 2>Yeah, well, I think that's something we all hope for.

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<v Speaker 2>Of course, we also know that the Supreme Court struck

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<v Speaker 2>down President Trump's tariffs, and I'm wondering where that leaves you,

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<v Speaker 2>Stu Leonards, and where that leaves prices on those goods

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<v Speaker 2>where they had gone up because of tariffs.

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<v Speaker 1>You know what, I think that's above my pagurade right there.

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<v Speaker 1>You know, we're a family business here in the metro

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<v Speaker 1>New York area. I don't really know how they're gonna

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<v Speaker 1>rebate people. I know, Costco was sueing the government and

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<v Speaker 1>I think our wine suppliers just wrote that there's some

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<v Speaker 1>money coming back from the tariffs on the liquor under

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<v Speaker 1>the business. But I don't really know how that's gonna

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<v Speaker 1>work out. I like getting a refund checked. I guess

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<v Speaker 1>a bit if it happened.

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<v Speaker 3>Heystu. One of the areas that seems to be persistent

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<v Speaker 3>area of inflation for shoppers just the cost of beef.

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<v Speaker 3>And you know, we've been told that the actual cattle

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<v Speaker 3>herd in his countries at a very low level. What's

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<v Speaker 3>what's your understanding of that market?

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<v Speaker 1>Hey, look what I've had for you right here? I

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<v Speaker 1>brought one of these how's that? Look? Oh, there we go.

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<v Speaker 1>That's that's what our ranchers when they come back from

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<v Speaker 1>the Midwest. That's what they want to eat for rib by,

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<v Speaker 1>you know, tomahawks, steak and they're great. But you know what,

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<v Speaker 1>right now there there is a fifty year low supply

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<v Speaker 1>of cattle. Right now, it's at the lower the herd

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<v Speaker 1>sizes of the smallest they've been, so obviously it's going

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<v Speaker 1>to drive price. One of the reasons is there was

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<v Speaker 1>a great drought. The grass wasn't out in the in

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<v Speaker 1>the pastors, so the ranchers had to start feeding the

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<v Speaker 1>cattle of food instead of letting them eat the freere.

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<v Speaker 1>So that drove the price of beef and it's held

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<v Speaker 1>up there. A lot of the ranchers we talked to

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<v Speaker 1>are starting to expand their herds now, so I sort

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<v Speaker 1>of see prices coming down on deep as supply increasons

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<v Speaker 1>a little bit. Well, you know, here's what you can

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<v Speaker 1>do if you want to save money instead of buying beef.

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<v Speaker 1>Like if I want to go get a New York

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<v Speaker 1>strip right now, it's going to be roughly around fifteen

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<v Speaker 1>bucks account. What you can do is instead if you

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<v Speaker 1>go to pork, which I've done it. We have this

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<v Speaker 1>prime pork from Pennsylvania and it's delicious, So you could

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<v Speaker 1>switch from a fifteen dollars product down to a five dollars.

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<v Speaker 1>You could do it with chicken. So we're noticing customers

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<v Speaker 1>a little bit of starting to alter their diets a

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<v Speaker 1>little bit. Yeah, by buying lower price items right now

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<v Speaker 1>makes a.

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<v Speaker 2>Lot of sense, and certainly everyone's taking a closer look

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<v Speaker 2>at those price points when they make that decision. Stu,

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<v Speaker 2>thank you so much for joining. Stuart Leonard Junior is

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<v Speaker 2>president and CEO of stut Leonard's a very popular market

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<v Speaker 2>across Connecticut.