Jetro Cash & Carry Enterprises Inc.

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Jetro Cash & Carry Enterprises Inc.

15-24 132nd Street
College Point, New York 11356
U.S.A.
Telephone: (718) 762-8700
Fax: (718) 762-8335
Web site: http://www.jetrord.com

Private Company
Incorporated: 1976
Employees: 2,000
Sales: $440 million (1999 est.)
NAIC: 42185 Service Establishment Equipment & Supplies Wholesalers; 42241 General Line Grocery Wholesalers

Jetro Cash & Carry Enterprises Inc. is a private company with two units: Jetro Cash & Carry, a wholesale grocery operation that operates cash-and-carry warehouses stocking a broad variety of items, including Jetro’s own private-label ones; and majority-owned Restaurant Depot, a similar wholesale cash-and-carry operation with warehouses selling food, paper supplies, and tabletop items to restaurants nationwide. Jetro Cash & Carry differs from conventional wholesalers in not providing delivery of goods nor requiring a minimum order. In some ways it resembles a warehouse club, but it does not charge a membership fee and only accepts trade customers, not individuals. Restaurant Depot, with sales volume at about one-third of Jetro Cash & Carry’s, functions in the same way. Jetro Cash & Carry Enterprises is a division of Jetro Holdings, Inc., which is owned in large part by Metro, a German retailer whose parent company is Swiss-based Metro Holding AG.

Jetro Cash & Carry: 1976-2000

Jetro Cash & Carry was founded in 1976 by private investors and soon spread its operations from New York City to California, New Jersey, Miami, and Philadelphia. By the mid-1980s the warehouse buying-club concept was well established. Like these enterprises, Jetro was housed in no-frills, bare-to-the-walls concrete floor and exposed ceiling facilities with merchandise piled high and sold at wholesale prices for the customer to take away. Unlike them, however, Jetro was open only to the trade (such as grocers, restaurateurs, and institutions) and charged no membership fee.

Jetro had revenues of $361 million in 1996. Any retailer or foodservice buyer who brought in a resale tax certificate in his or her name was entitled to obtain a Jetro customer membership card with no minimum purchase required. The company maintained 15 warehouses in 2000, of which four were in New York City. There were five more in California, with three in Los Angeles and one each in Oakland and South San Francisco. Jetro also had warehouses in Baltimore, Chicago, Jersey City, Miami, Philadelphia, and in Northborough, Massachusetts. The company maintained area offices in Atlanta, Chicago, Houston, Los Angeles, New York, and San Diego.

Jetro was distributing more than 11,000 products in 2000 at each of its locations. Product lines consisted of the following: automotive supplies; baked goods; barbecue accessories; beverages; bulk foods; candy; canned goods; chemical supplies; coffee/tea; convenience foods; cooking equipment; cookware; cutlery; dairy; delicatessen; foodservice equipment/supplies; frozen food; general merchandise; grocery; hardware; industrial wraps; light kitchen equipment; linens; meat and poultry; over-the-counter drugs; paper products; party supplies; pet supplies; plastic ware; produce; refrigerated entrees; sanitary equipment and supplies; school supplies; seafood; serving equipment; small appliances; snack food; specialty/gourmet; stationery; tabletop/tableware; tobacco; toys; video; refrigeration equipment; heavy kitchen equipment; brewing equipment; and storage equipment. Its private-label offerings included groceries under the Red & White name.

The markets being served by Jetro Cash & Carry were convenience and discount stores, drug and health-and-beauty-aids stores, grocery stores, hardware stores and home centers, restaurants, and institutional accounts. The number of foodservice accounts served was about 50,000. Jetro also was providing shopping guides, store directories, and warehouse staff to assist customers in locating the products they needed, seven days a week. Its customers were small shopkeepers and restaurateurs turning up at its warehouses. “We buy from manufacturers and make it available to them on a when-needed basis,” CEO Stanley Fleishman told Newsday in 2000. “Small grocery stores often have a tough time getting small quantities of product when they need them,” he added. Fleishman said Jetro was providing a greater variety of product than most bulk-discount wholesalers. The company’s slogan was, “We are your one-stop warehouse for savings, selection and service, seven days a week.” Metro purchased its stake in Jetro Holdings in 2000. Active in 18 countries, it was expecting much of Jetro’s growth to come from the western United States.

Restaurant Depot: 1990-2000

Restaurant Depot was founded by Jerry Cohen in 1990 in Elmhurst, a community in New York City’s borough of Queens. Like Jetro, it was a wholesaler with similarities to the warehouse clubs that were attracting a number of foodservice small businesses, such as “ma and pa” restaurants and small catering companies. Like these clubs, Restaurant Depot offered no credit or delivery service, fielded no salespeople or displays, and did not advertise in the mass media. To become a member required a resale or business license. In addition to low prices, Restaurant Depot offered the convenience and flexibility of buying in odd lots from day to day.

Restaurant Depot offered restaurateurs savings of up to 30 percent on more than 10,000 items, ranging from produce to paper goods and flatware. About half of these customers’ savings came from eliminating trucking and delivery overhead, and the rest derived from high volume and a no-frills location with more than 55,000 square feet of selling space. These customers included delicatessen and coffee shop owners, as well as schools and other institutions. The staff was helpful in advising customers on the kinds of equipment and products they would need to open their own businesses. At this time Restaurant Depot also was open to the public, with Cohen describing housewives as constituting five to ten percent of the warehouse’s business. Jeff Weinstein of the Village Voice visited the store in 1992, noting its “elephantile” shopping carts and bargains such as 24 eight-ounce bottles of San Pellegrino water for $12.95.

By the summer of 1994 Restaurant Depot was a division of Jetro. The Elmhurst warehouse had done so well, with sales volume of more than $100,000 a week, that the company began to open new outlets, including one in Pompano Beach, Florida. There were eight in early 1998, consisting, in addition to the ones in Elmhurst and Pompano Beach, of facilities in Baltimore; Chelsea, Massachusetts; Fountain Valley, California; Philadelphia; Plainview, Long Island; and South Hackensack, New Jersey. By this time the general public was no longer permitted entry; a free membership card was provided to those in the trade after presentation of a resale certification or tax-exempt number. Large orders could be called in and loaded onto trucks supplied by the customer. The Chelsea warehouse, a 52,000-square-foot facility a few blocks from the New England Produce Market, was aimed at Boston’s restaurant industry and included a tabletop and restaurant equipment department, weekly product tastings, and food preparation demonstrations. Two years later, the warehouse manager said it had become a primary resource for start-up restaurants and smaller mom-and-pop operators.

Restaurant Depot opened another Long Island-based warehouse in 1998, in Bohemia, a Suffolk County community. The 36-foot-high, 44,000-square-foot building included a three-bay loading dock and a 6,000-square-foot built-in refrigerator/ freezer. Like other company warehouses it was open seven days a week, although with limited hours on weekends. In this way a restaurateur who, for example, ran short of supplies on Saturday, could walk in and purchase needed goods on Sunday morning.

In early 2000 Restaurant Depot opened a new 45,000-square-foot warehouse in Pittsburgh, on the Allegheny River shore. Jetro’s director of marketing claimed that, like the division’s other warehouses, it would typically be able to sell its food products and restaurant equipment at 15 to 25 percent less than its competitors. By the fall of 2000, Restaurant Depot had opened five or six other warehouses, not counting the ones in Bohemia and Pittsburgh. In all there were at least 17 Restaurant Depot warehouses. Three were in California (Fountain Valley, Oakland, and San Diego), three in New Jersey (Kenilworth, Pennsauken, and South Hackensack), and three in New York (Bohemia, Elmhurst, and Plainview). Two were in Illinois (Alsip and Des Plaines) and two in Pennsylvania (Philadelphia and Pittsburgh). Others were in Baltimore, Chelsea, Milwaukee, and Pompano Beach. Customers consisted of convenience and grocery stores, restaurants, and institutional accounts. About 70,000 accounts were being served.

Restaurant Depot described itself in 2000 as selling a full range of fresh meat and produce, chicken and pork, frozen products, dry groceries, paper and cleaning supplies, beverages, and equipment. Its locations were being staffed by former restaurant owners, chefs, and foodservice specialists available for consultation. A monthly flyer of specials was being mailed to all registered customers. There was no minimum order.

Company Perspectives:

Jetro Cash & Carry is the nation’s leading wholesale grocer. Jetro introduces supermarket style wholesale shopping for retailers and institutional (foodservice) buyers throughout parts of the United States with over 11,000 products at each location at your disposal.

Key Dates:

1976:: Jetro Cash & Carry Enterprises is founded by private investors.
1990:: Restaurant Depot is founded by Jerry Cohen.
1994:: Restaurant Depot becomes a Jetro division.
2000:: Metro, a German retailer, takes a majority stake in Jetro.

Principal Competitors

Bozzuto’s Inc.; Costco Wholesale Corp.; Di Giorgio Corp.; Krasdale Foods Inc.; Key Food Stores Cooperative Inc.; Harold Levinson Associates; Penn Traffic Co.; Sam’s Wholesale Clubs.