Taking Stock

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After 83 Years, Santoni’s Closes; Shuttering Hastened By Nation’s Most Anti-Business Mayor 

I was saddened to hear the news that another independent grocer, Santoni’s Super Market, which operated in the Highlandtown section of Baltimore since 1930, has closed its doors, effective October 23.

However, this isn’t just another story of an independent retailer struggling with capital, technology and perpetuation issues in a very competitive playing field, The demise of Santoni’s can be directly linked to the mayor of Baltimore (Stephanie Rawlings-Blake) and the awful bottle tax legislation that took effect in 2010 that she helped revamp in 2012 that raised the tax from two cents per bottle to five cents per bottle.

According to Rob Santoni Jr., who was the CFO and general manager of the 28,000 square foot unit (the store was owned by his father Bob Santoni and his uncle Paul Santoni), the City of Baltimore’s beverage tax was the sole reason the business failed.

The younger Santoni noted that since the beverage tax levy went into effect in July 2010, his store has realized a total sales loss in excess of $4 million (18 percent of total revenue) and that sales in the store’s beverage category declined 28 percent. Santoni also stated that customer traffic count decreased 20 percent. Additionally, Santoni’s will lay off more than 80 employees.

“The damage done by the beverage tax is irreversible and proves that Baltimore retailers were right all along (in aggressively opposing the bill’s passage),” Santoni declared.

The Highlandtown store on Eastern Avenue was close to the original Santoni’s Market, opened by Rob Santoni’s grandfather, Savino, in 1930. It has served thousands of families in the tight-knit but evolving section of East Baltimore for the past 83 years. The supermarket’s closing also means that the independent retailer will end its “Virtual Supermarket” program which provided fresh food to underserved “food desert” communities via Santoni’s on-line shopping service. Santoni’s will also cease operations of Baltimore’s only free supermarket shuttle service which transported individuals living in food deserts to and from their store.

“The mayor has refused to listen to small business leaders. She is stubborn and will not admit that the beverage tax was a wrong decision on her part. Her insistence that Baltimore retailers carry this burden has not only cost my family our business, but the jobs of my employees. What has taken 83 years to build has been torn down by one person and one bad law. The mayor’s political arrogance is appalling. She obviously does not possess certain skills needed to run this city. The city has lost a great retailer and the Highlandtown community is losing a passionate and charitable partner.”

Following Santoni’s announcement of his store’s imminent closing, Mayor Rawlings-Blake released a statement defending the tax.

“I’m deeply saddened to learn that Santoni’s Super Market will be closing. Linking its closure to the bottle tax may be a good sound bite, but it doesn’t square with the facts,” the mayor said in a statement released through her office. “By the supermarket’s own admission, business struggled in recent years, which isn’t surprising given the depths of the nation’s recession and its impacts on local governments and businesses. My administration supports small businesses, which is why we worked in partnership with Santoni’s to establish our nationally renowned ‘Virtual Supermarket’ program that has provided healthy food choices to low-income residents and drove additional customers to the supermarket.

“It’s important that we not lose sight of the facts. The beverage tax was critical to helping Baltimore close a massive budget deficit without cuts to city services and provided a dedicated funding stream to help secure a historic investment of $1 billion in school construction funds. No one likes tax increases, but kicking the can down the road when it comes to our financial solvency and investing in our children is not an option.”

Santoni’s said he hopes to find a local buyer for the store.

Nobody’s arguing that the upgrading of the BaltimoreCity public school system isn’t a priority. But, that need should never come at the expense of a business that has nothing to do with the issue. That not only applies to Baltimore, but also New York, Philadelphia, San Francisco and other municipalities that have tried to extort food retailers to pay for services not directly connected to their businesses. And there are other concerns with the mayor’s statement. “Kicking the can?” What is Mayor Rawlings-Blake talking about? This is the Santonis’ family enterprise and has been for 83 years. The end stage of their business shouldn’t be viewed as collateral damage to the mayor’s other initiatives.

And then there’s the “my administration supports small businesses” mantra. I don’t think you can find one independent retailer that does business in Baltimore City who would agree with that statement. After talking with the majority of the independent supermarket operators who run stores in the city, I think they would describe Rawlings-Blake as being aloof, inaccessible, uncommunicative, and by their view, strongly anti-business.

Even if you believe in bottle taxes (which, clearly, I don’t) what other city imposes a levy as high as five cents per bottle and also taxes water? Water?

Clearly, there were other issues that plagued Santoni’s in recent years. But with the beverage category a major part of total overall sales, you can easily see how an additional 60 cent levy on a 12-pack of soda (or $1.20 on a 24-pack of water), would result in a significant loss of revenue and drive business to other retailers in nearby BaltimoreCounty.

It’s a sad day for Rob, Bob and Paul Santoni whose great family legacy has vanished. And there won’t be any joy in Mudville for other Charm City retailers either, as long as the nation’s most anti-business mayor is allowed to subjectively impose her will on the food retailing community in Baltimore.