Tuesday, July 03, 2007

Tony in, Rick out out

Rick Olivieri, proprietor of Ricks Steaks, and Paul Steinke, Reading Terminal Market General Manager, both confirmed today that no lease renewal was offered Olivieri. Rick's Steaks is scheduled to vacate its stall when the current month-to-month lease extension expires July 31. The RTM has sent Tony Luke's a formal proposal to take over the space.

The RTM board voted 6-1 not to renew Olivieri's lease and instead offer the space to Tony Luke's. No deal with TL's has been signed yet, and Steinke wouldn't hazard an estimate as to when they would begin RTM operations.

Olivieri said if he had been offered a lease, he would have signed it. "I've been in the market for 25 years, I've spent my life here."

Steinke said Rick's Steaks probably would have been offered a new lease if Tony Luke's had not expressed an interest in coming to the market.

Olivieri and at least one other merchant think his advocacy against mandatory hours as president of the RTM Merchants Association was, at the very least, a contributing factor to the decision not to renew his lease. (Olivieri points out that he is open most Sundays, even though Sunday hours are not mandatory.)

Steinke said that had nothing to do with the board's decision. He acknowledged the differences he's had with Olivieri and other merchants over mandatory hours and other issues, but said the decision was based on the chance to bring to the market a strong local operator who is regarded as the best in the business.

"Tony Luke's is a big draw," said Steinke, noting the recognition its sandwiches have received from both local and national news media. The RTM manager, after acknowledging the impact lease decisions have on individual merchants like Olivieri, emphasized that "the Board believes Tony Luke's will make the market stronger."

He added that the recommendation was brought to the full board by its own leasing committee.

Tommy Nicolosi, proprietor of DiNic's, and several other merchants appealed for the decision to be reversed when they met with the RTM board Monday.

Nicolosi said today that although Tony Luke's would not put him out of business, he's unsure how much impact it would have, especially if TL offered roast pork sandwiches, directly competing with DiNic's, as well as cheese steaks. Nicolosi observed that he doesn't have the space to add a grill for cheese steaks. His menu offers roast pork, veal, chicken, sausage and beef sandwiches.

Steinke said that in bringing any new vendor to the market his goal is to do it in a way that will not undermine the business of existing merchants.

Nicolosi and his son, Joe, said my earlier analysis of the hoagie competition at the RTM was fine as far as it went, but didn't go far enough. Father and son observed that only Carmen's relies on the hoagie business and benefits from the overflow of customers at Rick's. (A situation, I might add, that would no doubt continue or grow if Tony Luke's takes Rick's space.) Salumeria, they said, does a higher volume in cheeses, olive oils and other Italian grocery products than it does in hoagies, and Spataro's hoagie sales are secondary to its breakfast and cheese steak business.

* * *

Those are the facts and views expressed by the identified parties. What follows is pure, unadulterated opinion and speculation. (And, just to remind everyone once again, you get what you pay for.)
  • Olivieri won't go quietly into the night, as his petition drive demonstrates. It's unlikely he hasn't consulted his lawyers, and I'm sure articles will start appearing soon in the Inky, Daily News and the center city weeklies. The goal would be to create sufficient public and political pressure to have the board (whose membership includes direct representatives of the mayor and city council) reverse itself.

    Such a reversal is unlikely. But if it happened, think about how that impacts the ability and authority of Steinke, or any other manager, to do their job. More important, what would be the implications to the market's historic mission of providing a public market while preserving its financial viability.
  • The merchants don't like it, but mandatory hours (especially the requirement that merchants stay open for business until 6 p.m. weekdays) are essential. How else can you attract office workers to make a stop for produce and protein after work or compete with Whole Foods? Although I don't work in Center City and would rarely take advantage of later hours, I think extending them to 7 or 8 p.m. would be even better given the increasing residential nature of the neighborhood.
  • While there may be some impact on DiNic's if TL offers roast pork sandwiches, it's likely to be negligible. TL would be much better off devoting resources to cheese steaks because (1) there's only minor competition and (2) that's what the tourists and most of the office workers who populate the RTM at lunch time want. Even if TL sells pork, it would be a minor part of the volume (except among dedicated eGulleters).

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