Why are Italian grocery stores being phased out in the United States?
By JENNIFER HARRIS and PAUL JOHNSONThe United States is becoming increasingly isolated in Europe, and the Italian supermarket chain Belts is part of the problem, says David Osterman, senior vice president for global strategic initiatives at the European Union.
Italy has one of the most vibrant economies in Europe and is the European market leader, but the Italian government and retailers in the country are pushing back against its growth.
The Italian government recently asked Belts to stop selling its brand in Italy, a move that has hurt sales in the first two months of the year.
Italian retailers have blamed the company for a rise in inflation and reduced tax revenues, which they say is hurting the country’s economy.
Belts is a brand that has dominated the Italian market for more than 50 years.
The company sells over $1 billion in goods in the European region each year, but has lost sales to grocery stores such as Walmart and Whole Foods in recent years.
This year, Belts reported a profit of just under $1.4 billion, down slightly from a year earlier.
Osterman said Belts should have been able to sell its products in the U.S. because of the low cost of doing business in the region, which he described as a “pretty good business model.”
But he said it has become increasingly difficult for Belts and other retailers to sell in the market, and in some cases, Belters competitors have taken a cut of the profits.
Belts, which was founded in 1865, has been around for over 100 years, and has long been a leader in Italian and European markets.
The company has been trying to sell the brands it produces in the world’s largest market for nearly two decades, but its competitors have been working hard to stop it, Ostermons said.
Belters stores have been closed for a few weeks this year, and it has been forced to buy back its products at a higher cost.
The cost of its products has skyrocketed since it began selling them in stores earlier this year.
For Belts in Italy and other European countries, the biggest issue is that their products are being made at factories in China, not in Italy.
Ostersman said that the price for Italian products in general is higher than the cost of goods that are made in Italy because the country has higher taxes, and that Belts products are not as competitive in that market.
The result is that Italian manufacturers have been unable to compete effectively, he said.
Belters shares fell 7.9 percent to $1,255.70 in midday trading in New York.