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Jefferson Grocery closing wholesale division; will maintain retail stores — including Comet

May 11, 2011

Even though the Jefferson Wholesale Grocery Company is closing its wholesale division, company Vice-President Ben Levy said Wednesday that it will continue to operate its retail stores — including West End Comet in Punxsy. (Photo by Jennifer Barr)

PUNXSUTAWNEY — In the highly-competitive grocery world, Ben Levy said his family, which owns the Jefferson Wholesale Grocery Company, has found that a certain story from the Bible plays out only in the Bible.

“David beat Goliath only in the Bible,” he said, citing his company as the small David, competing against larger, Goliath-sized “big-box retailers” of the grocery industry.

Wednesday, Levy, who serves as a vice-president at Jefferson Wholesale, confirmed what he and other company officials told their employees last Thursday: That the company is closing its doors after more than 100 years as a family company and almost 50 years as the Jefferson Wholesale Grocery Company known today.

“We certainly feel terrible,” he said. “We’ve had so many great employees. These are people I’ve seen every day for 27 years, and they’re friends, people I’d take a bullet for.”

The good news: While it is closing the wholesale portion of its business, Levy said the company will continue to operate its three retail locations: Notably West End Comet in Punxsutawney, as well as the Clarion Food Warehouse in Clarion and J.G. Food House in Clearfield.

Instead of those stores being supplied by Jefferson Wholesale, C&S Wholesale, a New Hampshire-based firm with a warehouse in DuBois, will serve the stores.
Over the last 10 to 12 years, Levy said the company has seen a marked decline in its volume. With the closure of stores in towns such as Indiana, Beaver Falls, Lewistown, Franklin and Meadville, the company has almost been “selling wholesale to ourselves,” he said.

Levy said the business model that today’s Jefferson Wholesale Grocery was based upon does not exist in today’s marketplace, as “big-box retailers” enter small-town markets and build “60,000- to 70,000-square foot stores. They have everything, and they have great stores,” he said.

“Really, we were never set up to be a convenience store,” Levy said, adding that these days, one can find grocery items almost anywhere, including drug stores, convenience stores and dollar stores.

“Everybody and their brother is selling groceries,” he said.

Levy said Jefferson Wholesale’s decline has been gradual over the past decade, but became apparent this past fall, when some of the large vendors notified the company that effective early in the new year, they would no longer service the company with their products for wholesale due to Jefferson Wholesale’s falling volume numbers.

Over the years, Jefferson Wholesale has serviced vendors of many widely-known products, such as Proctor & Gamble, DelGrosso, Del Monte, Maxwell House, R.J. Reynolds and Hershey, just to name a few.

“The times have changed, and the financial health of wholesale accounts has been on an unbelievable, brutal decline,” Levy said.

Today, the company is still owned and operated by members of the Levy family: Sam Levy Sr., president/CEO; John Levy, senior vice-presidents; Rick Levy, secretary; and Ben Levy and Sam Levy Jr., vice-presidents.

Members of the Levy family owned Jefferson Wholesale Grocery since the early 1900s, when it was originally founded by Jacob Levy as a flour and feed mill.
Later in the 20th century, the company delivered groceries via horse and buggy, and in 1931, added its own line of groceries changed its name to Jefferson Grocery Company via a partnership between the elder Levy and his sons, Benjamin and Joseph.

When Jacob Levy passed away in May 1943, his two sons continued to grow the business prior to his son Ben’s death in May 1953. His brother continued to own the company until October 1964, when his two sons, John and Sam, purchased the business and incorporated it as the Jefferson Wholesale Grocery Company that people know today.

Ben Levy, son of John and nephew of Sam Sr., said they continue to help operate the business, which has remained a family operation.

He also said despite the company’s declining numbers, the senior Levys decided to remain.

“The numbers were so bad, there was really no other choice,” Ben Levy said. “But anybody else would have thrown in the towel years ago.”

He said he was ready to pursue a financial career on Wall Street after college, but was persuaded to remain at the company to create his future.

Many of the employees — including some members of the Levy family — began their careers at Jefferson Wholesale right out of high school, he said.

“We’d do it all again,” he said.

The company still faces a few challenges before its wholesale component gradually slows down. While its vendors have been notified of the closure of the wholesale component, Levy said the company will continue to serve its accounts as long as it is able, and a few other wholesale companies will help bring down its inventory. The company also has a few avenues to explore in parting with some warehouse equipment.

Levy said wholesale operations will wind down until about Friday, May 27, which has been outlined as the wholesale component’s last day of business.

Also, the company seeks to make sure the transition from Jefferson Wholesale to C&S Wholesale serving its retail stores with several thousand items is seamless to the customer.

Some stores will continue to receive items from Jefferson Wholesale for a short period of time, while others will receive items from C&S.

“It will take a little time,” Levy said. “That transition will be a month or so before it is up and running.”

Finally, the company is also helping its effectively laid-off employees find work in other parts of the industry, Levy said.

Levy denied that employees — 47 total, 37 full-time, 10 part-time, 102 retail employees — were notified about the company’s closure via letters. He said actually, Punxsy employees gathered last Thursday at the office so company officials could formally inform them of their decision.

“We felt that was the best way, live and in color,” he said.

He said he believes that some employees — especially those who work in the warehouse — could see the writing on the wall: Decreasing numbers of shipments, 15 to 16 daily stops reduced to three or four, he said.

“There was no question our people knew,” Levy said.

“It’s the people who are beyond compare,” he said about the company’s employees. “We can’t say enough about how much they’ve done for us over the years.

“We wish our people the best,” Levy said. “We sure as hell think the world of them.”

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