Business

May 11, 2008

Amish-run salvage stores soar

MEGHAN BARR Associated Press Writer

MESOPOTAMIA, Ohio — In a quiet gas-lit farmhouse, two girls in bonnets and long blue dresses wind tape around expired bottles of Newman’s Own salad dressing, and wipe dust off dented cans of vegetables and crumpled boxes of Butterfinger candy bars.

They are picking through the leftovers from America’s supermarkets.

Amish-run salvage stores, a thriving discount industry tucked away in America’s farmlands, sell expired food and medicine dirt cheap. This shadow economy, run by people who typically shun modern methods of commerce, is drawing a steady stream of non-Amish customers seeking relief from the country’s financial ills.

“We have anything from a Mercedes in our parking lots down to horse and buggies,” said Ray Marvin, general manager of B.B.’s Grocery Outlet, an Amish-owned salvage store chain in Quarryville, Pa.

The customers are after prices resembling those of old-fashioned nickel-and-dime stores — paper towels for 50 cents a roll, salad dressing for 10 cents a bottle.

Except for baby formula, the Food and Drug Administration doesn’t prohibit the sale of expired foods or medicine. The agency bars the sale of adulterated or misbranded drugs, but those are evaluated case-by-case.

Everything else is fair game — “buyer beware,” as B&K Salvage owner Bill Gingerich puts it.

Salvage goods also show up on the shelves of some close-out stores, but those primarily sell bulk wholesale and overstocked goods at discounted prices.

“We’ve been amazed, how good we’ve done,” says Rebecca Miller, an Amish woman who opened N&R Salvage with her husband last year on the outskirts of Mesopotamia, in northeast Ohio. The couple have never taken out an advertisement, she says, but the customers keep coming.

While most of these Amish-run businesses have been around for several years, store owners say business has picked up considerably in recent months as the country struggles with rising gasoline and food prices, a credit crisis and home foreclosures.

Mike Mitchell, owner of Amelia’s Grocery Outlet in New Holland, says sales grew by 12 percent in 2007, and his chain of 11 stores is on pace to increase sales by 23 percent this year.

There are at least six Amish-run salvage stores in northeast Ohio and nearly a dozen in Lancaster County, forming something of a discount shopper’s marathon course.

“A lot of people drive from one salvage store to the next and see how many bargains they can get,” says 41-year-old Barbara Byler, an Amish woman who runs Shedd Road Salvage in Burton, Ohio.

Heavy losses of manufacturing jobs have hurt Amish and non-Amish alike in northeast Ohio. The nearest city, Cleveland, recently landed on a list of the country’s top five poorest urban areas.

“I’m trying to find ways to cut back on my grocery bill,” says 73-year-old Shirley Baxter, pushing a shopping cart down the aisles of B&K Salvage in Middlefield, Ohio. “And a place like this helps. At our age we’re on a fixed income.”

The narrow aisles spill over with water-damaged taco shells (25 cents per package) and pesto sauce that expired four months ago (five packets for $1). Fresh bags of homemade flavored gelatin and rolled oats are usually in stock, along with oddities such as light-up Disney princess pens.

There’s low-price facial moisturizer, tubes of old toothpaste, discounted rolls of toilet paper — even expired over-the-counter medicines.

Food becomes salvage after it’s discarded by supermarkets, typically because it’s damaged or nearing expiration. Seasonal products whose shelf life is over, such as Christmas-themed paper plates, also end up in the scrap heap.

The products are then shipped to reclamation centers. Some are thrown out; the rest gets packed up in banana boxes and trucked to discount stores across the country.

“We separate all the different categories, like the vegetables from the fruits, let’s say,” Gingerich explains. “The desserts from the barbecue sauce, that kind of thing.”

Products that are too old or moldy are thrown out or marked as free, says Byler, at Shedd Road Salvage. Greg Martin, manager of Banana Box Wholesale Grocery, a Kutztown-based food brokerage outlet that works with salvage stores across the country, says he’s seen incoming loads covered in cat litter.

Customers at B.B.’s boil down to “people who value a dollar,” Marvin says. The chain has expanded to four stores since opening 15 years ago.

Amish expert Don Kraybill of Elizabethtown College, calls the popularity of salvage stores a “mini Amish industrial revolution.” He says it is a natural outgrowth of booming Amish micro-enterprises, a result of the decline in farming.

“Their businesses frequently succeed because they have low overhead, they work very hard, they’re creative,” Kraybill says. “And they have an ample pool of labor within their extended families.”

Other Amish-run salvage stores are scattered throughout the country, said Marvin, of B.B.’s Grocery. Damage Recovery Systems, a Pottstown-based company that ships salvage from supermarkets to discount stores, also does business with Amish-run salvage stores in Wisconsin, said Tom Conoscenti, executive vice president.

Even the salvage stores are feeling the effects of the economic slowdown. Banana box shipments arrive infrequently; some stores receive just one truckload each month.

But to observe the popularity of the salvage economy, look no farther than Orwell, Ohio, population 1,529. In this blip of a town there are three competing bulk discount stores, including the Amish-run M&L Salvage and Bulk Co.

Store manager Sara Fisher says her family, which runs the store, closely monitors fliers from the Family Dollar and the Dollar General to maintain the lowest prices in town.

Despite the competition, M&L Salvage is in no danger of going out of business.

“Each year is better than the last,” Fisher said. “The people who come here are buying more. We have one customer who comes here every day.”

“We’ve been amazed, how good we’ve done.”

Rebecca Miller

of N&R Salvage

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