Stew Leonard Jr., Stew Leonard's President & CEO Talks Consumer Affordability Crunch

Summary

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Podcast Summary: Bloomberg Talks

Episode: Stew Leonard Jr., Stew Leonard's President & CEO Talks Consumer Affordability Crunch

Date: May 22, 2026
Host(s): Carol, Tim (Bloomberg)
Guest: Stew Leonard Jr., President & CEO, Stew Leonard's

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Overview

This episode dives into the current affordability crunch faced by consumers, focusing on rising food prices and inflation, especially as Americans prepare for Memorial Day celebrations. Stew Leonard Jr. shares firsthand insights from the grocery retail front lines, highlighting shifting consumer behavior, challenges from supply chain disruptions, and the persistent issue of elevated prices for both stores and shoppers.

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Key Discussion Points & Insights

1. State of Consumer Spending & Sentiment

• Current mood: Mixed—shoppers are buying but grumbling about higher prices ([01:02])
  • Stew Leonard Jr.: “Sales are brisk. Customers are buying, but they're also complaining… about the prices of food right now. And not only just food, but... their overall expenses in their normal lives.”
  • Examples of cost pressure: tomato farming costs due to freezes; transportation costs; customer complaints about fuel and insurance.

2. Rising Food Prices: Causes & Negotiations

• Inflationary pressures: Prices up 3% year-over-year at Stew Leonard's—would be only 1% without management efforts ([01:02])
  • Freezes in Florida affecting tomatoes
  • Increased cost to transport goods (up $2,000 per truckload)
• Resistance to passing on full costs:
  • Stew negotiates with suppliers to split burden but can’t raise prices too much for consumers
  • “I can't raise price. So, you know, our prices at Stu's compared to last Memorial Day are probably up about 3%. They'd only be up like 1% if it wasn't for me.” ([01:32])

3. Changing Consumer Choices

• Trading down:
  • Less premium steak, more affordable proteins ([03:08])
    • “One thing people are doing is they're switching from their proteins. Like... instead of having a steak, get a nice pork chop and it's like 10 bucks a pound less.”
  • Chicken and pork are growing in popularity due to lower prices (“chicken... four to five dollar a pound range”).
• High-end products as treats:
  • Example: Tomahawk steak (~$70 at the store, double that at a restaurant) ([03:40])

4. Supply Constraints: Meat Market Pressures

• Historic lows in herd sizes:
  • “We're at a 50-year low in herd price sizes in America.” ([04:07])
    • Reason: High feed and maintenance costs due to drought and limited grass, necessitating more expensive feed imports
  • It takes roughly two years for supply to recover when cattle populations are reduced.
• Optimism for future price relief:
  • Herd sizes are slowly rebuilding
  • Expectation that meat and fuel prices may come down as global conflicts and weather disruptions resolve
    • “I do think meat prices are going to be coming down in the future... I really think fuel prices are going to come down once we get things straightened out in the Middle East.” ([05:14])

5. Breakdown of Food Inflation: Supply/Demand vs. Cost

• Permanent vs. temporary inflation:
  • Labor costs are likely to remain high (“Labor is not going to go down. That's inflationary right now.”) ([06:45])
  • Other inflation (e.g., eggs) driven by supply shocks like avian flu, not necessarily by government policy or broad inflationary trends ([06:45])
• Product example:
  • Watermelon: $6–$7 whole; prepared and cut, significant extra labor cost—labor rates up to $25 an hour (without benefits), which are unlikely to fall ([06:20])

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Notable Quotes & Memorable Moments

• On customer sentiment:

  • “I'm stuck in the middle a little bit. You know, on one hand, I got to negotiate with this farmer... but I can’t raise price.” —Stew Leonard Jr. ([01:38])

• On price comparisons:

  • “If you went to a restaurant and you ever ordered something like [the tomahawk steak], you'd be paying 150 or at least double or more for that thing.” —Stew Leonard Jr. ([03:43])

• On labor costs:

  • “It’s for us, nearly $25 an hour right now without benefits...[cutting a watermelon] and that’s never going down.” —Stew Leonard Jr. ([06:20])

• Long-term view on prices:

  • “We’re at a 50 year low in herd price sizes…But you’re seeing it build right now. That’s why I'm optimistic… I do think meat prices are going to be coming down in the future.” —Stew Leonard Jr. ([05:14])

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Timestamps for Important Segments

• [01:02] – Sales brisk but pricing complaints and cost pressures from both suppliers and customers
• [03:08] – Consumer switching to cheaper proteins (hamburgers, chicken, pork)
• [04:07] – National cattle herd sizes at a historic low and its impact on prices
• [05:14] – Outlook on future prices; hope for softening inflation
• [06:20] – Real-world labor cost challenges in food retail
• [06:45] – Distinguishing supply/demand shocks from headline inflation
• [07:23] – Wrap-up and Memorial Day well-wishes

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Tone and Language

The discussion is practical, candid, and relatable, mixing humor with behind-the-scenes detail (“I got a son-in-law who loves meat all the time”) and addressing listeners as fellow shoppers navigating inflationary times.

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Summary

This episode offers a clear-eyed, insider perspective on the affordability crunch in food retail as America heads into a big grilling holiday. It provides valuable context on price drivers (weather, supply, labor costs) and how both consumer behavior and supermarket strategies are adapting. Stew Leonard Jr. remains hopeful about future relief but is frank about the structural factors keeping some costs high.

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Transcript

[Indiana University Announcer]

Indiana University strengthens tomorrow's workforce with practical, real world experience. IU grads make a difference in your community, serving as teachers, nurses and engineers who rise to tomorrow's challenges and meet them. Learn more at iu.edu impact,

[Narrator/Host]

Bloomberg Audio

[Stu Leonard Jr.]

Studios Podcasts, Radio News.

[Carol]

We're thinking about Memorial Day. We're thinking about what goes into a Memorial Day picnic and celebration. This is happening as global food climbed to their highest level in more than three years as the Iran war disrupted supply chains. You know, we kind of kicked it off talking with Stuart And Mike, Michael McKee, of course, about inflation concerns, and that includes food. So we've got a great voice to get into all of this.

[Tim]

Let's head to Stu Leonard's in Norwalk, Connecticut. The President CEO of Stu Leonard. Stu Leonard. Stu Leonard Jr joins us. Stu, happy summer. I just want to start off with the question, is it, is it a happy summer at this point? What are sales telling you? What are customers telling you?

[Stu Leonard Jr.]

Well, first of all, hi, Carol and Tim. How you doing? First of all, the thing that would make me happier if you didn't talk about all the rain and everything that's supposed to happen, you know, that that doesn't help our sales. We want everybody to go out and barbecue and cook cheeseburgers out in their backyard. No, but I would say right now, sales are brisk. Customers are buying, but they're also complaining. Okay, they're complaining about the prices of food right now. And not only just food, but I think their overall, you know, expenses in their normal lives. Like as an example, the other morning, I got a phone call from our farmer, tomato farmer in Florida. He said, you know, I got some bad news. He said, you know, we had a big freeze down here. I had to replant my crop. Tomato prices are going to be up, and it's going to cost me $2,000 more to send the tractor trailer truck from Florida up to the New York area to your stores. And then I come down here in the store and I'm talking to a customer that just said, hey, I just went and filled up my Suburban and that cost me $50 more and my energy costs at home, insurance, everything. So I'm stuck in the middle a little bit. You know, on one hand, I got to negotiate with this farmer, which I did, and we're going to split the, the cost, but I can't raise price. So, you know, our prices at Stu's compared to last Memorial Day are probably up about 3%. They'd only be up like 1% if it wasn't for me. You know, and you asked me about some props earlier, but, you know, here's one of our great. Oh, tomahawk. Oh, yeah. This is what, you know, if you can put this on the grill this weekend, you know, for boreal dance, it's a crowd pleaser.

[Narrator/Host]

But Stu.

[Tim]

Yeah, it would be. But that's going to set you back. I mean, you're talking about a very expensive cut of meat there. And you mentioned cheeseburgers earlier. Mike McKee talking to us a little earlier and he said, you know, at some places they're charging you just for walking by the meat department. That's how expensive it's gotten.

[Stu Leonard Jr.]

Yeah, but you know, one thing people are doing is they're switching from their proteins. Like, you know, that's obviously the most expensive thing you can buy is a big ribeye steak. But then he can also go down to just getting some plain hamburgers. So you notice people switching a little bit. They're going to chicken. That's only in the four to five dollar a pound range right now. They're going to pork. I've even been doing that. Instead of having a steak, get a nice pork chop and it's like 10 bucks a pound less.

[Tim]

How much, how much is that tomahawk that you held up per pound?

[Stu Leonard Jr.]

Oh, gosh, I bet you this will be about $70. Okay, get this. But hey, if you went to a restaurant and you ever ordered something like this, you'd be paying 150 or at least double or more for that thing.

[Carol]

So how many people, how many people can eat that chop?

[Tim]

How much would I eat?

[Carol]

I know my husband be like, that's mine. But I'm just saying two or three people could probably chop into that, right?

[Stu Leonard Jr.]

Oh, yeah, for sure. You know, it really depends. I mean, who's a big meat eater? You know, your husband probably would love to devour. I got a son in law who loves meat all the time and he, he could make a big dent in that thing. So, you know, but, but you know, it's, you know, right now you're seeing people really just trying to save money. But you know what the thing with meat right now is? We're at a 50 year low in herd price sizes in America. We just had some of our ranchers back from the Midwest and they're really just saying there's just less cattle. And why is that? Because, you know, it costs them a lot of money to feed them because of the droughts and everything that happened in the Midwest. And there's not as much, you know, grass out in the field for the cattle to eat. They got to import the corn and the soy and alfalfa for the cattle to eat.

[Carol]

So, Stu, that was a problem, I feel like last year, too. Like, we've been talking about the herd situation for a while. Is that as you talk to the ranchers, any of that going to get better or easier or.

[Stu Leonard Jr.]

No, it's. It's getting better now, but it takes two years to really grow a little calf from like 3, 400 pounds when they're born, all the way up to maybe 1600 pounds when they're, you know, harvest. So, you know, it takes. It takes time. But you're seeing it build right now. It is. It is growing. And that's why I'm optimistic about a couple of things. One of them is I do think meat prices are going to be coming down in the future. You know, even our ranchers and everything agree with that. And the second thing, I really think fuel prices are going to come down once we get things straightened out in the Middle east, which can't be forever. I mean, it's got to be resolved at some point. So I think we're going to see some softening on these inflation numbers as far as food goes in the future. But you know what? Here. Here's what's really interesting, Carol. I think you have to break up this inflation into supply and demand and actual cost. Like, from our standpoint. Like, I'll give you an example. You can go buy this watermelon right here. By the way, watermelons are great right now. They're really sweet. So here's. Here's a watermelon. You can go buy that. It's about six bucks or seven bucks at the store. Or you can do this. We can have somebody cut these up, the labor for me to have a nice lady or guy back there cutting these up. It's for us, nearly $25 an hour right now without benefits.

[Tim]

And that's never going.

[Stu Leonard Jr.]

That's never going down. And so there's a couple of things that are not going to go down. Labor is not going to go down. That's. Yeah, that's inflationary right now. But. But I think the supply and demand of food, like, for instance, I always laughed when I would read about people saying about egg prices. Eggs had nothing to do with inflation, no government policy or anything that just had to do with the avian flu. So supply and demand is built in. And if you look, we just had some fires out in Simi Valley, as I mentioned the cold snap down in Florida, right. The droughts out. These affect food price.

[Carol]

We gotta run. Always love checking in with you Stu. Happy Memorial Day. We're gonna keep our fingers crossed you don't get rain. Stu Leonard Jr. Of course President and CEO of Stu Leonard's, enjoyed talking with him. We talked with his daughter Blake, who runs their spirits and wines business, a little bit earlier.

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[Narrator/Host]

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