STOCK MARKET WATCH -- Tuesday, 28 October 2014

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39. The Ur-Deli 170 53 57 How Katz’s stays in business against the odds.

http://www.slate.com/articles/business/continuously_operating/2014/10/katz_s_delicatessen_how_the_iconic_deli_stays_in_business_against_the_odds.html



When I sit down with Jake Dell, the 27-year-old heir to Katz’s Delicatessen, at a table toward the back of his family’s storied restaurant, he’s staring distractedly into his phone. His expression reads one part bewilderment, two parts resignation.

“Did you know there was a Beef magazine? Or a Cattle Network?” he asks. “I’m head first in cattle pricing—more than I’ve ever been.”

Katz’s is New York’s oldest surviving delicatessen. It is also, of course, the restaurant where Meg Ryan faked an orgasm in When Harry Met Sally (and has a sign inside to remind you). But far more importantly, it is the ur-deli, a place that, for a certain kind of American Jew, might trump the Western Wall in the hierarchy of Hebraic cultural heritage sites. While the current location, with its schmutzy wood paneling and walls covered with photos of celebrity diners, merely dates back to 1949, the restaurant has operated on the Lower East Side since 1888, serving up heaping, hand-sliced portions of its smoky, peppery, and unctuously fatty pastrami, along with house-cured corned beef, bocce-sized matzo balls, and other classics of the deli canon. To step inside its front door, under the pink neon signage and past the curtain of salamis hanging in its window, is to be enveloped by the thick, meaty aroma of history (as well as a throng of tourists, especially if you show up on a weekend).

But with a throwback menu comes a throwback business model, the downsides of which are especially apparent in these days of astronomical beef prices. That’s one reason why Dell—whose grandfather purchased Katz’s in 1988 and who in recent years has taken over most day-to-day oversight from his father and uncle—is fretting. If you want to fully appreciate why a place like Katz’s is special, you have to appreciate its odd economics, which pretty much ensure there will never be another deli quite like it.