Monday, September 14, 2009

Someone is Going to Hurt: Who is it Going to be?

I am just stating the obvious when I say that in bad financial times people have to cut back, cut down and cut out. You can't have it all when there isn't enough money to pay for that "all." An interesting discussion ensued in school on just this idea. One person, however, seems to have put his finger on one of the reasons why a lot of Klal either can't do this cutting or doesn't want to do this cutting.

In the frummer neighborhoods services are provided by other frum people. Let me use Flatbush/Midwood as an example. Go up and down the various shopping areas and what you see are dozens of stores that are owned by frum people, and whose target audience of shoppers is the frum community. Clothing stores of all types whose merchandise is strictly aimed at frum consumers. Kosher restaurants in abundance. Bakeries and butchers on seemingly every block. Seforim and gift shops. Candy and nut shops. Kosher grocery stores carrying no treif merchandise. Now expand your looking a little and you will see catering halls of every type and description, from the very small to the gigantic.

There are also obviously frum stores which aim at a broader customer base, carrying items suitable for everyone, not just frum customers. However, at heart, they count on the frum community to be their base support. Appliance stores are the prime example. Everyone can be a customer for a microwave. But Shabbos urns? Shabbos clocks? Shabbos mode appliances?

Cutting back, down or out on any of the goods and services mentioned above (and others not mentioned) means that your savings will result in less money available to another frum person. And where there is less money available to that frum person, that person will have less to spend in the other frum stores. And will have less money available for tzedaka purposes. And will have less money available for school tuition or donations to a school.

Those communities that have made themselves dependent on only frum providers of goods and services have placed some people in a sticky financial situation. They have only X amount of money right now, and X amount will only buy them 30-80% of what they need or want, if they shop at the frum stores. But supporting their fellow Jews is a mitzvah and a requirement. They continue to shop only at these frum stores. And because they don't wish to cause financial harm to another Jew, they cause themselves some financial harm.

Let me get more specific. I have posted before about the price of clothing in frum clothing stores. Frankly, it's obscene. No, every general clothing store may not carry an abundance of choice in clothing that is tsniusdik. But they do have some, and have the clothes at prices so far below the frum stores that the differential is really not funny. A beautiful tiered, long denim skirt, up to the minute "modern," purchased online for $12.99 including shipping, on sale. Seen that price in a frum store lately? A beautiful patterned, lined, long skirt, up to the minute modern, purchased at Today's Woman on sale for $16.99 with a $5 off coupon from the newspaper, for $11.99 total. 3/4 sleeve cotton tops with high necklines on sale at Kohls for $6.99 each. The list could and does go on and on.

Yes, there are some types of stores that we need to be under frum ownership and supervision. But just how many bakeries does a frum community need? How many butcher shops? How many seforim stores? And just how many kosher restaurants and caterers are "necessary"? Do we truly need a pizza shop on every corner?

For business owners, limiting themselves only to a frum clientele works only some of the time--the financial boom times. But when things get tight financially these business owners are going to suffer--maybe. They'll suffer if their frum customers look at their personal finances and say "I can't spend as much or I can't spend at all." The problem is where the customers have rachmonos on the store owners, because they are a fellow Jew, and spend money they really can't afford to spend.

With only a few exceptions, it's a bad business model to base all your possible sales on one specific sub-group, particularly if you are in competition with many other stores targeting that specific group. Frum store owners need to learn how to diversify if they are going to keep earnings steady. And it wouldn't hurt if they had competitive prices with the "outside" world either.

There's an English saying that covers what I've just said: "Don't put all your eggs in one basket." It applies to customers, who should be looking all over for the best prices available, and it applies to stores, which need to expand their customer base.


Anonymous said...

Mom and pop stores across the country are struggling because of the competition from big box stores and the internet. The jewish mom and pop stores stay in business because they cater to a jewish clientele. How is a kosher restaurant, for example supposed to diversify? Why would gentiles and jews who don't keep kosher go there if the choice is more limited and the prices are higher? How can a small kosher grocer compete? Perhaps by having the best selection of produce at good prices like the other ethnic green grocers, but then you also have to entice people into the neighborhood and make sure you have superior service.

I think the bigger issue may be a lack of diversification of professions and careers and businesses so that outside money is being brought in and willingness to work outside of traditional jewish areas.

Allen said...

You're right anonymous that there needs to be more diversification, especially in the areas with large frum populations. But I think the post pointed out that when it asked just how many of any given type of frum store is necessary or even healthy for one community. You're right that a kosher restaurant might have trouble attracting people who don't eat kosher, but how many of those restaurants can a community support, especially now? One restaurant might weather the economic storm, but 20?

Certain "Jewish" products simply cost more, but the frum owned stores take advantage of that fact way too many times by putting their prices up too high. I think the clothing stores are a good example of that. They don't even seem to be trying to be competitive in a market that is now global, maybe because they are counting on the guilt factor, that the community will support them because they are frum, no matter how lousy the service or prices.

Dorry said...

I think this is where smaller communities have an advantage over the bigger ones. We don't have doubles of the stores selling items the frum community wants or needs. We have one seforim store, one bakery, one butcher. There is one pizza shop and one meat restaurant/take out food place. The only store owner that tried to take advantage of his being the only game in our town went out of business because people refused to pay more for less.

It's also I guess that people looking to open a business here know that they can't make it on the frum community alone so they diversify right from the beginning.

I think that some of the much larger communities are encouraging a ghetto mentality and that's bad for business.

Dave said...

I live in a small town, and intentionally do most of my shopping and dining out locally, because I value having these local (and non-chain) businesses.

I do not, however, buy everything locally. Some things are unavailable, some things are purchased via the Internet, and some things are from Costco or other larger discount chains.

Effectively, there is an economic value which I place on having my local businesses, and as long as the price differential is within that, I shop locally. If the price differential is significantly higher, or there is a significant convenience factor (for example, I'm going to be right by the Costco anyway), I will shop elsewhere.

This same feature happens with things like Shadegrown or Fair-Trade Coffee. The people buying it have placed an economic value on supporting that style of agriculture, but if the price for it were outside their valuation, they'd ignore it and get the regular stuff.

rejewvenator said...

ProfK, I love the work you're doing on your blog, but I think you have the economics of this one all wrong.

A 'Jewish' clothing store can't compete with a big-box on price. So they don't. Instead, they compete by targeting a niche market and serving that market better than the big-box. By only stocking tznius products, they make shopping more convenient. In exchange, they charge a premium price. This is a smart business strategy.

While a clothing store could diversify by reaching out to other traditional communities that value modest dress, the approach is difficult. Part of the appeal of these store is the Jewish-only clientele. Would they be as popular if Muslims and Mormons were also shopping there? Would Muslims and Mormons be attracted to a Jewish neighborhood for this kind of shopping?

A rough economy hurts all business. Those run most poorly will go out of business. Are Jewish businesses well-run? Some yes, some no. But having fewer stores is a guaranteed way to have worse stores. When there's only one pizza shop, poor quality and poor service are the norm. Competition can be cruel, but it is very positive for the community.

Really, my big problem is with the idea that it is the community's responsibility to support businesses. I think the opposite is true. It is the role of business to provide value for the community! If a business isn't providing a good value, then it shouldn't exist. If the problem facing a business is transitory, not structural, I can appreciate the role of community responsibility in helping the business ride out tough times - this is hakarat hatov. But if the problem is structural, then by supporting a bad business you are stealing from the community, denying them the opportunity to have a different business come in and provide better value.

Anonymous said...

I think ProfK is on to something.

A jewish business can bring in outside business if it knows how to advertise and has something special to offer. For example, in downtown Boston there is a kosher restaurant that is always packed at lunchtime. The trick is that they don't serve any traditional kosher food like deli or knishes or kugel. It is milchig and appeals to vegetarians and people who want a change from the typical sub or salad for lunch. The food is fresh, the menu changes and the space is nice, bright and clean. It is not in a jewish neighborhood, but being closed saturdays is not a problem since it mostly serves an office crowd. These restaurant owners were thinking out of the box.

I'm sure it can be done with other businesses too. For example, a good kosher bakery could get a kiosk near the subway or make arrangements with a grocery chain to stock some of its products. A kosher poultry grower/slaughterer could expand its market if it ventured into free range and hormone free, for example. The women's clothing store perhaps could expand its clientele if it advertised its wide selection of clothes for the professional woman and made sure it had a good selection of classic suits in quality fabrics and a seamstress to do alterations.

Lion of Zion said...


"When there's only one pizza shop, poor quality and poor service are the norm. Competition can be cruel, but it is very positive for the community."

agreed. in general, my experience in communities with 1 pizzeria is that the food is of poorer quality, prices are higher and the service is worse

ProfK said...

Re "they charge a premium price," let's call it what it mostly is--price gouging. When a suit in store X costs $100 but in a "frum" store that same suit is marked on sale at $369 you've gone beyond premium. The target audience has been talked into the frum store being more convenient by having a wide selection. But at what price? Today especially we have to look at both convenience and the money in our pockets.

Just one example. A few years back I was shopping in the Jersey outlet malls. One in particular carries a wide selection of suits--all perfectly tsniusdik. I found a suit that fit, looked good and I realllly like the price. I wasn't looking for it particularly but the suit also was one of those "well known labels."

I walked into shul and sure enough another woman was wearing the same suit. She gushed to me that I must have heard about the terrific sale at X store in Boro Park. Can you imagine? she asked. "Only" paying $179 for such a metzia. I just nodded. Why make her miserable. Her metzia only cost me $34 in the mall. Convenience? I call it highway robbery.

Lion and Rejewvenator,
I've eaten in some of the pizza stores in Brooklyn--ho hum and mediocre come to mind. And service? Surely you jest! And let's not even discuss some of the prices.

Re "When there's only one pizza shop, poor quality and poor service are the norm" and "in communities with 1 pizzeria is that the food is of poorer quality, prices are higher and the service is worse" you really need to find some new communities to visit.

In SI the pizza has excellent quality, polite service and fairly decent prices compared to elsewhere. We had a pizza shop before this one came in. It lasted about a year because this is not a community that will support price gouging, bad quality and poor service. The shop has a wide range of dishes besides pizza and does milchig catering in the area when you need a milchig simcha set up. They also provide the kosher dairy and pareve meals for many hospitals, city wide. What the owners are are smart business people.

If you're good you make it; if you're not don't play the frum card with me. To put it bluntly, I believe that it's illegal to pay to get screwed in NY. It certainly isn't required just because a store owner is frum.

Anonymous said...

ProfK: I loved your suit story, and it was very kind and wise of you to keep your mouth shut -- it's so hard not to brag about a bargain. However, in fairness, this could have easily happened if the other woman bought her suit at a non-jewish store, such as a chain or department store. Sometimes getting a super bargain like you did is the luck of being at the right place at the right time. I've done the outlet store clearances and discount route many times and they never seem to have my size or if they do, its only available in the hot pink version.

ProfK said...

I agree that the other woman could also have overpaid at a non-Jewish store. And yes, you don't always get the bargains at the outlet malls. But please, tell me the last time--or maybe the first time--that anyone got that kind of bargain in one of the Brooklyn frum stores?

There's also this--SI is a "rainbow" community and the women don't stick to only black or navy blue, with an occasional brown thrown in. Makes it easier to shop in the outlet malls when you aren't stuck to 1-2 colors.

Oh, and if you really want to see price gouging, walk into a few of those "frum" furniture stores, particularly in Boro Park.

Anonymous said...

SI: I can understand frum clothing stores, food stores and book stores, but what makes furniture frum? No double beds? no tv consoles? couches with dividers down the middle?

Dave said...

It's the dining room suite with built in mechitza.

ProfK said...

What makes it a frum furniture store? You won't see two beds displayed on one headboard--they can special order that headboard for only some sets. Special prices when you buy a double bed and single bed together. Seforim cabinets. The most ornate china cabinets this side of Versailles. Dining room sets that come with 8-10 chairs standard. Ornate wall mirrors--again, see Versailles. Wall units that don't contain a center console for a television.

"Big" selling point is that a lot of the furniture is imported from Europe, specially crafted. Boro Park "simple" styles would qualify as ornate anywhere else. They also offer special orders in custom sizes for items that regular furniture stores don't. You can get those dining room tables and china cabinets and display cabinets custom sized. You can get the couch custom sized. The seforim cases can be custom sized.
Gee, all it takes is money, lots of money.

kosher clothes said...

Rejewvenator, why would it be a problem to have non-Jews shop in our clothing stores on Coney? I was on line at the Land's End counter in Sears last week, and a woman with a headwrap asked the frum lady in front of me where she buys skirts for herself and her daughters, because they're so hard to find.

If more customers brought down the prices on Coney, maybe I'd shop there, too, instead of at Land's End and Old Navy.

Anonymous said...

ProfK: Thanks for the explanation of frum furniture. I'm sure many of those items can be purchased elsewhere. Large dining room tables with extra chairs are not so uncommon. Aren't Seforim cases book cases. There are plenty of places you can get sturdy book cases with extra deep shelves and/or with glass doors.

Furniture is a little different than clothes and food since its one of the few items where large chains don't dominate, putting aside some lowish end furniture like IKEA. But even IKEAS are still somewhat few and far between.

a frugal newlywed said...

The prices in the tznius clothing stores are INEXCUSABLE. When I had to stock up on Bais Yaakov uniforms, it was $40 per boring black skirt, and $35 per boring button-down shirt. Tights came in at $7 a pair and didn't last more than 3 wearings. I was able to find the same stuff at Old Navy for half the price, and no one even knew, I was wearing the same uniform as everyone else!
I buy tichels at H&M for 7 bucks a piece, and I bought a great synthetic sheital from a costume shop for $150 that looks just as good as human-hair precuts that sell for 4x that. We need to show zero tolerance for this price-gouging!

Lion of Zion said...


i was careful to qualify with statement with "in general." i'm glad SI is an exception. i remember eating crappy pizza in edison, philaldephia and atlanta. west hempstead was good.

as far as gouging, what about hats?

(although personally i have nothing against price gouging. if the market is dumb enough to go along, so be it.)

Orthonomics said...

There is no mitzvah to buy things you don't need/can't afford. Nor do you have to patronize businesses that are not competitive. I believe there is a 20% difference to make that halachically permissible, but hours and convience count too. I use kosher grocers for the things I can't buy in the regular grocery store. But everything else, after sales and coupons, is a far better price in regular groceries.

Orthonomics said...

While I am worried about many of our institutions, I'm not so worried about private businesses. I don't want to see anyone hurt, but the free market will take care of things, and those who capitalize on niche markets or diversify will make it.