Rising wholesale prices continue to plague seafood retailers and put a damper on their sales. In fact, cost is retailers’ No. 1 challenge in SeaFood Business’ biennial retail survey. Fifty-six percent of retailers said their biggest challenge for 2012 was rising wholesale prices, compared to 42 percent in 2010.
Other major challenges cited by retailers include: shoppers’ price resistance, consumers’ lack of knowledge about seafood, competition from supercenters and sustainability-related issues.
“Our wholesale prices have gone up 20 to 25 percent over the past year. Several other fish markets have gone out of business, but we hang on,” said Susan Shebilske, manager of one of four Madison, Wis.-based The Seafood Center stores. To stay in business, The Seafood Center stores do not invest in new equipment, and they have been forced to raise retail prices twice over the past year. In addition, some of the company’s stores have slashed their daily fresh seafood options from around 30 different species to around 20 species.
Wholesale prices at the Nantucket Shoals Seafood Market in Albuquerque, N.M., have also gone up 25 to 30 percent over the last year, said owner Nancy Chavez-Berg. “It is probably because I am very small — I am not a Walmart that can buy in bulk — but it is also because of the high cost to get it here,” says Chavez-Berg. She’s watched air-freight costs rise USD 1.15 a pound on average to ship seafood.
“Some prices have come down from last year, but most of them are up. It’s hard to keep your margins and you don’t want to scare people off,” said Ray Mullio, consultant for Original Fish Co., a fish market and restaurant in Los Alamitos, Calif. As a result, Original Fish Co. is carrying more of the seafood items that have declined in price this season, such as frozen halibut and shrimp, and less of species such as Alaska king crab that have been priced higher this year, according to Mullio.
Click here to read the full story which ran in the October issue of SeaFood Business >
