Hawaii’s grocers are dropping clients, chopping operations

Hawaii’s largest grocers are faced with the challenge of keeping business going due to the COVID-19 pandemic. However, many continue to buy mainland groceries and other products to serve local customers.

Lauren Zirbel, executive director of the Hawaii Food Industry Association, said traders had taken more precautions in handling deliveries to stores.

“Every retailer will have different problems depending on which segments they serve,” she said in an email. “The dramatic decline in tourism has affected all of Hawaii, including the food sector.”

The head of a retailer, Y. Hata and Co. Ltd., noted that Hawaii’s food chain is “very vulnerable” due to its isolation from producers. “Only a small part of the food comes from Hawaii. Most of the rest comes from the mainland and comes across water, ”said Russell Hata, chairman and CEO, in an email. “Because the cost of land, storage, labor, and electricity are so high in Hawaii, the island only has two to three weeks of supply.”

The 107-year-old company Y. Hata started out as a corner shop in Hilo. Founders Yoichi Hata and his wife Naeko sold goods from their garage to the public. Russell Hata, her grandson, wants to keep the legacy alive.

In March, Governor David Ige and Honolulu Mayor Kirk Caldwell restricted dinner at local restaurants that are still allowed to offer take-away meals. However, some food companies have temporarily closed because they couldn’t afford to stay open or because they had other concerns.

Y. Hata typically serves over 3,000 customers nationwide, but that number has declined. Hata said 43% of his independent restaurant customers have closed their business and 57% “run a skeleton crew”.

“These numbers are constantly changing as some customers choose to close and some customers choose to re-open for take-out,” he said.

Hata estimates his company is losing up to $ 3 million a month. He added the company had reduced its 24-hour operations from seven to five days a week and some Wednesday and Saturday deliveries were suspended.

Two of Y. Hata’s seven locations across the state have closed and the company laid off a quarter of its employees, Hata said. Other employees saw wage cuts of 10% to 20%, and some executives, including Hata, received no wages at all.

Despite the challenges, Hata is optimistic that the company will survive after the pandemic.

“I think we can go three to six months with no relief,” he said. “Five to eight months with relief. But there are many variables like: will customers be able to pay us? Right now customers are having a hard time paying us, and I have told our accounts receivable department not to push for collections because customers don’t have the money. “

With the company’s warehouses overflowing with groceries by 30% to 40%, Hata works with Pagoda Floating Restaurant, affiliates of Kamehameha Schools, Hawaii Lodging & Tourism Association, and Kauai County to “bring groceries to communities so families don’t have to go to crowded stores. “

Hata said the company will sell and donate food to people in the Maili, Waipahu, Ala Moana areas and the airport, and hopes to expand the service to more communities.

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