Outsold by outlets, Kosher shops eating leftover matzvah

On the heels of Passover, proprietors of small kosher markets and Judaica stores are brimming with emotional maror — and they've got scads of leftover matzah to spread it on.

San Francisco's Israel Kosher Meat, Poultry and Deli ordered six 24-pound cases of matzah — 10 percent of what it stocked last year — and is left with 3-1/2 unsold cases.

On the other side of Golden Gate Park, Tel Aviv Strictly Kosher Market has four surplus cases, despite ordering only 20, half of last year's total.

Berkeley's Afikomen Jewish Books, Gifts & Arts is stuck with the most matzah of all, 250 surplus pounds of it. Stacked atop each other, the excess boxes would tower 15 stories high — amounting to a loss of several hundred dollars.

Apart from the financial loss, the larger problem is how to get rid of matzah now that Pesach is over and it's open season on bread once again. Some stores have tried giving the matzah away — to no avail.

"Nobody will take it," said Tel Aviv Strictly Kosher Market owner Micheil Treistman. "One time I called the Salvation Army to give and they said there is no need. I need to give and nobody wants."

Afikomen owner Jerry Derblich had better luck dumping off his massive quantities of unsold matzah.

"I gave away 60 pounds to the Jewish Family and Children's Services of the East Bay," he said. "I tried to get them to take more, but they didn't think they'd have a use for it."

Trying to make the best of a not-too-good situation, Derblich hopes the temptation of free boxes of matzah might help draw customers into his store.

All of these store owners blamed their plummeting sales of matzah — and other Passover items — on large stores like Safeway and Albertson, and especially Costco.

Utilizing the same strategy that has reduced the Main Streets of middle America to boarded-up ghost towns leading to the local Wal-Mart, warehouse giant Costco has catapulted into the kosher food business, undercutting its smaller competition.

"This year, Costco killed everybody. Customers come and say Costco sells gefilte fish for $7.99 [for 14 pieces] and matzah for $2.75 [for five pounds] and I say go to Costco. What can I do?" said Liza Avrutin, co-owner of Israel Kosher Meat, Poultry and Deli. "Costco killed everybody."

Costco sold five, one-pound boxes of Aviv matzah for $4.89, slashing the price to $2.77 as Pesach drew near. By comparison, most Bay Area kosher shops and supermarkets peddled matzah at between $2 and $3 for a one-pound box.

"Now everybody has matzah; big stores have matzah. And big stores can sell it cheaper, or at cost," Tel Aviv's Treistman added.

Just as Costco specializes in incredibly cheap 50-gallon drums of mayonnaise or cartons of 18 toothpaste tubes, volume is the key to the store's success in kosher foods. Paula Haase, the inventory control expert for the Bay Area's 39 Costco warehouses confirms that the chain purchases matzah "by the container-full."

As a point of reference, a container is roughly 40 feet long, 10 feet wide and 12 feet high. Buying in such bulk, Costco benefits from wholesale prices that not even the area's large supermarkets can match.

"Matzah is not a money-maker anymore because of Costco," said Isaac Klein, who has co-owned San Jose's Willow Glen Kosher Market with his wife, Miriam, for the past year. "I, for one, probably ordered a lot less matzah than other guys did. I remember what happened last year — the owner before me had a lot of matzah left over."

Unlike other kosher store owners, Klein was not stuck with much excess matzah, thanks in part to a promotional giveaway: During the Pesach season, customers spending $75 or more were awarded a free box.

Dave Bennett, co-owner of the Bay Area Mollie Stone's chain, says that this year's matzah sales were about the same as last year's, up in some stores, down in others, but "maybe that depends on where Costco locations are."

Crediting his relatively unaffected sales to customer loyalty, Bennett admitted that Mollie Stone's could never compete head-to-head with larger area markets.

"We will never be able buy on the scale of Costco or Trader Joe's," he said. "We will never be able to sell so far below costs or what appears to me to be so far below costs."

Afikomen's Derblich recalls how he started selling matzah three years ago to help Bay Area Jews, who at that time were forced to pay as much as $18 for five pounds of matzah. So he offered matzah for virtually no profit as a loss leader, selling five-pound parcels for $9.95 that he'd bought for $9.75.

"We made a big 20 cents for every five pounds," he recalled. "We did it as a way to get customers in here."

The days of pricey Bay Area matzah are in the past. And not only did Costco have the best price, but it also cornered the market on Aviv matzah from Israel.

"We were not able to get Aviv at all," Derblich said. "It was available at Costco, and I have a feeling Costco bought it all."

Joe Eskenazi

Joe Eskenazi is the managing editor at Mission Local. He is a former editor-at-large at San Francisco magazine, former columnist at SF Weekly and a former J. staff writer.