Stew Leonard’s CEO and President Stew Leonard, Jr. joins Yahoo Finance Live to talk about food price inflation, especially for barbecue essentials ahead of the July 4th holiday, meat prices, and consumer spending trends as gas prices continue to rise.
DAVE BRIGGS: All right. Hey, kids, how about ordering pizza for the 4th of July? That's because your holiday barbecue is going to cost a lot more this year, with ground beef prices up for 136% from just a year ago. Stew Leonard, Jr. Is the president and CEO of Stew Leonard's seven grocery locations in our area. Stew, good to see you, sir. Hope you're enjoying--
STEW LEONARD JR: How you doing?
DAVE BRIGGS: --this holiday weekend. Those high prices I mentioned, are they causing a shift in holiday sales?
STEW LEONARD JR: Well, you know what, I'm confused. I'm here in the store right now, and our ground beef sales are the same price as they were last year. So we haven't raised the price on that. So some of these numbers that I'm hearing about that are reported across the country might relate to certain items, but they don't relate to everything in general. You know, we've had to raise prices about 5%. But there's still great value in the store, and there's great specials every week. And, Dave, I like your idea about serving some pizza at this 4th of July.
SEANA SMITH: Stew, do you think we've seen a-- do you think we've seen the peak when it comes to inflation? Or could we see food prices climb even further into the fall?
STEW LEONARD JR: Well, so far right now, what we've noticed-- and, you know, Mike Derivan buys our meat for us, and he's on the phone with the Midwest every day. And he said he's seen meat prices soften right now. Now, we didn't hear that for two years. And you're talking to our lobstermen up in Maine and Canada, and you're starting to hear lobster prices come down. So I feel like the supply chain issues are starting to get worked out a little bit, and we're starting to see some of the-- a little relief. There's light at the end of the tunnel.
RACHELLE AKUFFO: And so in terms of how people's mindset is changing or how their behavior is changing when they're trying to decide what to buy in a market when you do see things going up, are you seeing some sort of changes in what consumers are buying and why?
STEW LEONARD JR: You definitely can. Like, for instance, for the first time in my life-- and our family's been in the food business all my life, I grew up in it-- I've never seen chicken prices be higher than ground beef prices at this time of the year. And this year, they are. So we're seeing some little shifts. I'd recommend go for the hamburger, you know, rather than the chicken breast on the grill.
The other thing that we're noticing is something like this, this is shucked corn that you can buy, OK? All done. You don't have to make a mess at home. Or you can go buy your normal ear of corn like this. It's more expensive, obviously, for us to do it at Stew Leonard's, shucking it and packing it for you. But you'll save some money if you buy it-- in other words, chop it yourself at home.
DAVE BRIGGS: Love me some grilled corn. You know that, Stew. All right, so you said you've raised prices about 5%. Have you been forced to trim margins to keep customers content?
STEW LEONARD JR: Well, yeah, you have them. We're just shouldering that this year. You know, we're private. We're not public. We can do what we want. But the way I sort of explain it is like if myself, one of our farmers and suppliers, and a customer went out to dinner and the dinner check comes, all three of us are throwing our credit cards in. And our suppliers have eaten a little bit of it, we've eaten a little bit of it, and the customers, you know, feeling a little bit of it in some higher price.
SEANA SMITH: Stew, we talked about this shift during the pandemic. People were cooking because they simply couldn't go out to restaurants. Has that trend continued? Are people still buying like they were in 2020 and 2021?
STEW LEONARD JR: Well, I think there's pent-up demand right now that we're seeing out there. And same you're seeing about travel in the airport. People are looking at COVID maybe a little bit just like the flu now. And they're just deciding, I want to get out and really party and get together with my family and celebrate this country's independence right now. We even saw a little spark at Father's Day right now. But even though our sales are up a little bit, our average sale is down. So you can-- customer count's up, average sales down. You can see the customers are buying what they need and not what they want.
RACHELLE AKUFFO: And as you know, a lot of people are sort of turning to the convenience for some of these e-commerce, like your Amazon Fresh, to try and get their groceries. But me, I love a good free sample. I like to actually get my hands on what I'm buying before I buy it. How are you finding the in-store experience changing right now?
STEW LEONARD JR: Well, you know, Rachelle, that's a good question. It was about 5% of our sales pre-pandemic. It went up to 25% of our sales during the pandemic. And it sort of dropped back a little bit to about 10%. But now with the fuel costs, we noticed deliveries actually increasing again because a lot of people are saying, I can get it delivered cheaper than if I had to go fill my car with gas and go out shopping for it. So we're seeing delivery rebound a little bit right now.
DAVE BRIGGS: All right, Stew--
STEW LEONARD JR: But I agree with you. I like to touch it. I like to feel it. I like to smell it. I like to be in the store myself.
DAVE BRIGGS: I'm with you. Absolutely. So it's note-taking time. Give the consumers some advice when they're shopping for their 4th of July barbecue, how they can save a few bucks this weekend.
STEW LEONARD JR: OK, well, first thing, come to Stew Leonard's, right?
The second thing I would say is, look for specials. I mean, we have specials all the time. You usually get a lot of them on these apps, you know? I mean, I got a little Starbucks app, and I'm getting hit with all these notifications and specials all the time. So look for the app deals. The other thing is, buy local, because right now, that cuts your transportation costs.
Like, look at this. We got some beautiful New Jersey blueberries right here now. You can save $0.50 to $1 a box if you buy them rather than get something that you have to ship all the way from California. And the other thing really is just buy what you need and not what you want. You know, I tend to always add a little extra to everything. And we can tell customers are starting to be a little more frugal about their shopping list.