NEW YORK – Greek-American businessman and philanthropist John Catsimatidis is expanding his supermarket holdings by taking controlling ownership of the D’Agostino chain of supermarkets. Catsimatidis, the owner of the Red Apple Group, which operates the Gristedes chain of supermarkets, told Real Estate Weekly (REW) about the deal on September 18.
With competition growing from Amazon and others, Catsimatidis told REW that “I’m talking about acquiring another company,” adding that “we’ve bought every competitor in the last 25 years.”
Nick D’Agostino, CEO of the family-run D’Agostino chain, is still involved with the company, Catsimatidis said. The radio talk show host and former mayoral candidate has outlasted the competition in part though acquiring his competitors’ stores, though REW reported that supermarkets represent less than two percent of Red Apple Group’s assets, while real estate is about 15-20 percent. Catsimatidis first began investing in real estate in order to make space for his supermarkets, noting that “you control your future that way,” REW reported.
“Red Apple Group and its property investment arm Red Apple Real Estate own and manage over 2,000,000 s/f of real estate primarily in New York City, Pennsylvania, Ohio, and Florida,” REW reported.
The company is also in energy, finance, and insurance and when asked if he is focusing more on properties or supermarkets, Catsimatidis told REW that “his new residential buildings in Coney Island (the two-tower Ocean Dreams complex) cost $300 million to build while a new store costs $1 million.”
“You do the math,” he told REW. “Retail is dying by the dozen. Supermarkets are dying faster. What you have to do is work harder and be better than your competition.”
In the effort to outdo the competition, Catsimatidis noted that some Gristedes stores will become D’Agostinos and vice versa, REW reported, adding that he might open more Foodtown stores which he licenses in the suburbs though he does not own the brand.
The Gristedes located at 355 1st Avenue across from the Peter Cooper Village will re-open at the end of the month after renovations as a D’ Agostino market, REW reported.
That particular location has been plagued by bad reviews on Yelp with customers regularly complaining of high prices and expired items on the shelves. It is the only location, so far, which will undergo the brand transformation since Catsimatidis noted that changes will be decided for each store on a case by case basis and according to the needs of the neighborhood.
When asked about the difference between Gristedes and D’Agostino, Catsimatidis told REW that “the main difference is the different crew. The Gristedes crew grew up in a Red Apple environment, and the D’Agostino crew were always with that family.”
The new Foodtown in Catsimatidis’ Ocean Dreams development in Coney Island is scheduled to open by year’s end, REW reported, adding that pricing will be “more suburban,” according to Catsimatidis who said, “It’s not like the rents we pay in the city, since we own the building.”
Catsimatidis told REW in conclusion, “It’s getting tougher and tougher to do business and the community should support their local supermarkets, because if there’s no supermarkets at all, it’ll get much worse.”