For the Ferri family in Murrysville, Westmoreland County, Pennsylvania, the era of their multi-generational grocery store business is coming to an end. After relocating their store from Turtle Creek, Pennsylvania to the town of Murrysville 70 years ago, the family is now facing the pressures of inflation and the unexpected closure of the Mainline Pharmacy, located inside their iconic building. These factors have become the final straws that led to the closure of their beloved family-owned grocery store.
In a heartfelt post on their Facebook page, the family-owned grocery store announced its closure at the end of May, expressing how over the years, they have served as the “cornerstone of our community, fostering connections across generations.”
Earlier this February, the local independent pharmacy chain, Mainline Pharmacy, with 11 outlets in the town of Murrysville, suddenly closed its doors. The red, white, and blue pharmacy chain was spread across towns like Harrison City and Level Green, with many employees having worked there for over 20 years. The pharmacy owners cited a sharp decrease in reimbursement rates from the pharmacy benefits management company, with reimbursements often falling below the actual costs of the medications.
The pharmacy benefits management company acts as a third-party entity, serving as an intermediary between insurance providers and drug manufacturers.
According to a post on Mainline Pharmacy’s Facebook page, the pharmacy stated that due to low reimbursements, they had lost over $350,000 on 17,500 prescriptions since January, making it unsustainable to continue operating.
Gary Silvestri, the general manager of Ferri Grocery Company, mentioned the substantial impact of losing the pharmacy’s rental income and customer traffic, as the pharmacy contributed to 20% of their business. He stated, “This, coupled with the relentless impact of food inflation on both the store and customers, has made our operations unsustainable.”
Despite being a community grocery store, facing competition from mega-retailers like Target and Walmart just a few miles away, the pressure from these retail giants constantly squeezed the independent stores. Chain stores have the advantage of massive purchasing power, enabling them to offer lower prices than independent stores. In the era of inflation, consumers seek cheaper options to stay within budget, affecting loyalty to local businesses.
General manager Silvestri mentioned how customers wanted to remain loyal, but financial constraints often dictated their shopping choices. He said, “At some point, the pressure to watch your wallet naturally influences where you decide to shop.”
Jeff Hastings from Wholesale Central, a leading content publisher in the wholesale industry, highlighted the struggles of small businesses in the face of major retail chains like Walmart, Kmart, and Target opening since 1962, leading to a tough journey for local small businesses, from hardware stores, clothing outlets, shoe shops, to pharmacies and grocery stores.
The Department of Agriculture’s report in January 2023 revealed a doubling in the food grocery sales share of the top 20 retailers in the United States from 1990 to 2020, while traditional independent supermarkets’ share dropped from 80% in 1990 to 62% in 2012.
Though small and medium-sized businesses are crucial to the American workforce, the alarming closure rate is disheartening. Over half of small businesses shut down within the first five years.
Despite being able to sustain for 70 years, the Ferri company is exiting the business world. The continuity of a family business into the second and even third generation is rare. Along the way, they employed thousands of young individuals in the community, many of whom visited this week to thank and bid farewell.
Some workers have spent decades at the store. Young and old, along with loyal customers, walked through once-busy aisles now emptied of canned goods, diapers, and over a hundred other products, their tears reflecting genuine emotions.
At 68 years old, Silvestri, who started at Ferri as a teenager stacking groceries, unloading trucks, and sweeping floors, has worked at the store for 51 years, even working part-time here during his college years at Penn State New Kensington.
Leaving the community grocery store is not just leaving a building; it signifies leaving behind roots and loved ones. “It’s not easy,” he said. “I see parents coming in with their grandchildren, and I remember them accompanying their parents here 50 years ago.”
The United States Small Business Association states that there are over 33 million small businesses nationwide, employing over 60 million people. These businesses are vital drivers of the economy but are feeling unprecedented changes, with wage decreases, labor shortages, and the impact of inflation on employees like a cashier who worked at the grocery store for decades repeatedly mentioning “inflation, inflation, inflation.”
When these small businesses close, the losses run deeper than imagined. Without the employees of Ferri Grocery Company touching the lives of countless residents in small but meaningful ways, the past week wouldn’t have been filled with tears and nostalgia.
Silvestri mentioned that the hardware store in the basement of the Ferri building will continue to operate, and they hope another independent grocery store could step in and thrive.
“We will wait and see,” he said. “No doubt, the closure of our company will definitely have consequences.”