Closing After 83 Years: Santoni's Market Blames Beverage Tax For Drained Profits

BALTIMORE (WJZ)— An iconic family-owned grocery store in Highlandtown will close its doors by the end of the month. Santoni's is pointing the finger at Mayor Stephanie Rawlings-Blake for a sales loss.

The grocer cites the mayor's beverage tax levy on Baltimore City retailers as the sole reason for its business failure.

"The mayor has refused to listen to small business leaders. She is stubborn and will not admit that the beverage tax was a wrong decision on her part," said Rob Santoni Jr. in a news release. "Her insistence that Baltimore retailers carry this burden has not only cost my family our business, but the jobs of my employees. What has taken 83 years to build has been torn down by one person and one bad law. The mayor's political arrogance is appalling. She obviously does not possess certain skills needed to run this city. The city has lost a great retailer and the Highlandtown community is losing a passionate and charitable partner."

Mayor Rawlings-Blake rejected those allegations, releasing the following statement Sunday night:

"I'm deeply saddened to learn that Santoni's Supermarket will be closing. Linking its closure to the bottle tax may be a good sound bite, but it doesn't square with the facts. By the supermarket's own admission, business struggled in recent years, which isn't surprising given the depths of the nation's recession and its impacts on local governments and businesses. My administration supports small businesses, which is why we worked in partnership with Santoni's to establish our nationally renowned Virtual Supermarket Program that has provided healthy food choices to low-income residents and drove additional customers to the supermarket. It's important that we not lose sight of the facts. The beverage tax was critical to helping Baltimore close a massive budget deficit without cuts to city services and provided a dedicated funding stream to help secure a historic investment of $1 billion in school construction funds. No one likes tax increases, but kicking the can down the road when it comes to our financial solvency and investing in our children is not an option."

Well known in the Highlandtown community, Santoni's has been the outspoken leader against the beverage tax and warned that the tax would be detrimental to city retailers.

The store claims that since the beverage tax levy went into effect in July 2010, Santoni's has realized total store sales loss in excess of $4 million since 2010 or 18 percent, but the beverage sales category has experienced sales decreases exceeding 28 percent during the same time period. Since the tax went into effect, customer traffic count has decreased 20 percent.

Santoni's will lay off more than 80 employees.

Santoni's will also end its partnership with the Baltimore City Health Department on a nationally recognized "Virtual Supermarket" program that provided fresh food to underserved "food desert" communities via Santoni's online shopping service.

Santoni's will also end operations of Baltimore's only free supermarket shuttle service, which transported individuals living in food deserts to and from its store.

They say they hope to find a local buyer for the store, but say local prospects are reluctant to buy in the city.