When Santoni’s, the 83-year-old independent grocery store in Highlandtown, announced it was closing a few days ago, chief financial officer Robert N. Santoni Jr. named the city’s five-cent bottle tax as the “sole” reason.
Mayor Stephanie Rawlings-Blake quickly shot back with a refutation, saying the business’s struggles are due to “the depths of the nation’s recession,” not the beverage tax, which was “critical to helping Baltimore close a massive budget deficit without cuts to city services.”
At least for an outsider, it’s hard to believe that a puny-sounding tax on beverages could really single-handedly bring down a long-running business providing such an essential, leaving its 80 employees suddenly out of work. But to industry insiders the argument doesn’t sound that ridiculous.
Fred Metzger, publisher of a grocery trade publication out of Columbia, believes the tax was “a prime factor” in the Santoni’s closing.
According to Jeremy Diamond, managing director of a Baltimore consulting firm, the grocery business has become incredibly competitive, and profit margins are razor thin. “The slice of the supermarket dollar has gotten smaller and smaller,” he said.
But could it really be so small that a three-cent hike on the city’s bottled-beverage tax could put you under?
Santoni claims the supermarket lost customers — presumably to untaxed competition from the county — on the order of 2,500 to 3,000 customers every week ever since the initial two-cent tax was introduced three years ago.
Whoever’s to blame, the closing will be a blow not only to the company’s workers, but to residents of East Baltimore’s food deserts who benefited from the store’s home delivery service.
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