CLARION – There are several reasons for the planned closing of the Clarion Comet Market, but one of the owners of Jefferson Wholesale Grocery Company said Monday that the number one reason was the impact of PennDOT’s project over several years along Route 68.
Add pension problems and competition, and you have a perfect storm.
“What happened in Clarion was due to several factors, but number one was the project,” said Ben Levy from Punxsutawney. “There were essentially 18 months where ingress and egress were really difficult. So, what we did, we trained our good customers to go elsewhere for an extended period of time, and we were just never able to get them back. It was just so hard to get in and out of the store.
“We feel horrible about it. We’ve been losing a lot of money for the last four years,” Levy continued. “The reason we stayed in business is our good, loyal customers and we have great people at that store. Good, kind, caring and hardworking employees. It honestly makes me sick.”
Pension problems and competition were also factors.
“The other problem was the Local 23 Pension Fund,” said Levy. “I will say in layman terms, it went bankrupt; it actually went into a state of mass withdrawal. We were assigned a liability of over $1.2 million. We have paid in just shy of $700,000, and we have now been told that none of that $700,000 will be able to count towards a settlement. We’ll have to start over. It’s one of those ticking time bombs out there in the union world. The defined-term pension plans that guarantee benefits are so vastly underfunded. Local 23 was merged into 1776 United Food and Commercial Workers. The pension was a multi-employer fund with lots of employers involved.”
According to a story in the Philadelphia Inquirer, “1.5 million workers in multi-employer pension plans nationwide are facing dissolution within the next decade. Already, 120 plans have shut down and received $1.4 billion in assistance from the Pension Benefit Guaranty Corporation, a federal insurance agency that pays workers a reduced pension should their union plan fail. The federal agency subsidized so many plans that it is now expected to run out of money itself by 2025.”
Levy said the company tried to hold on, but it was just too much.
“We certainly resisted for as long as we could. We just got the pension news last week and for us to ever settle that — unfortunately we had to go this way. It’s really a shame; so many good, long-term people.”
Competition with other stores was also a factor in deciding to close.
“There’s no question that the competitive landscape is brutal out there,” Levy said. “It’s not just the big box stores like Walmart — it’s Sheetz, Family Dollar Store or drug stores selling lots of groceries. Aldi’s has picked up everywhere, and they have been a much bigger threat than in the past. Margins are just so razor-thin to begin with, and you add that extra layer of competition, and it’s just really tough.”
Members of the Levy family owned Jefferson Wholesale Grocery since the early 1900s when Jacob Levy originally founded it 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 and changed its name to Jefferson Grocery Company.
Today, the Clarion store has just over 30 employees. The actual building is owned by a partnership consisting of similar shareholders of Jefferson Grocery. Dollar General is a tenant.
“We hope to bring somebody in as soon as possible,” said Levy. “We’re talking to two different grocery retailers and one retailer in a different field.”