GOING BOLDLY

Wexford Post Office Deli doesn't let sour economy stall its plans to move and grow

From the June 13, 2003 print edition of Pittsburgh Business Times
By Tracy Carbasho

A recent expansion/relocation project is expected to help Wexford Post Office Deli & Catering double its annual revenue within the next five years.

" Our sales volume last year was about $900,000 for the catering side of the business and about $230,000 for the deli,'' said company president Paul Mitchell. "The expansion will enable us to handle more business, especially at the busiest times of the year in June and December.''

Mr. Mitchell said the decision to expand amid the still uncertain economic climate will pay off as the business environment continues to improve. He likened his expansion to the strategy employed by Armonk, N.Y.-based IBM, which invested in its operations during the Depression while many other companies pulled back. During the 1930s, IBM kept producing new machines even though demand was slack. Mr. Mitchell said IBM's status as an industry leader in business machines was a result of that strategy.

" The expansion was appropriate from an economic standpoint and we found the right facility at the right time and in the right place,'' said Mr. Mitchell. "I think the economy is getting ready to turn around and we are seeing a return to larger family gatherings. Corporate clients will also be giving us more business.''

Chris Stankewicz, business development manager at the Bobby Rahal Automotive Group in Wexford -- a longtime customer -- said Mr. Mitchell has earned respect for his business and customers view the expansion as a positive move.

Richard DeKaser, chief economist for National City Bank in Cleveland, said the merits of expansion vary from business to business, depending on their prospects and capacity levels. However, he said that the current market presents the best financing environment in more than 40 years.

" We've observed a cautious, but improving, disposition on the part of businesses. Corporate loans are rising, albeit modestly, for the first time in well over a year,'' said Mr. DeKaser. "We're at an interesting moment. Leading indicators that reflect improving expectations, such as rising consumer confidence, rising equity values and narrowing credit spreads, are upbeat." He said that, in contrast, these indicators were negative last fall and the economy subsequently stagnated.

When Mr. Mitchell purchased the business in 1993, the catering service was bringing in about $250,000 per year in sales with the deli producing just slightly less at about $225,000. Mr. Mitchell saw potential to grow the corporate catering business, especially in the North Hills, Wexford, Cranberry, Moon Township and Zelienople areas.

The deli continues to operate in the historic post office building at 120 Wexford Bayne Road in Wexford. However, the kitchen and catering operations have been moved to a larger facility at 1271 Big Sewickley Creek Road in Sewickley.

" We started looking for a new facility for the kitchen and catering business two years ago because we reached our maximum sales level at the previous facility, which was 1,800 square feet," said Mr. Mitchell. "We found the Sewickley facility in October 2002 and we moved here in February.''

The total cost to purchase and renovate the new 3,000-square-foot building for use as the catering/kitchen operation was $195,000. The food for both the deli and catering business is made at the new facility, which features state-of-the-art refrigeration units and ovens, as well as sufficient storage and production space. A total of 26 individuals work at both aspects of Mr. Mitchell's business and he said he will soon be hiring additional kitchen employees and event planners.

Mr. Mitchell has an optimistic outlook regarding the economy and is already thinking about additional expansion projects. In fact, he hopes to open more delicatessens in the Moon Township, Southpointe, Bridgeville and Strip District areas within five to seven years. His future plans also call for the opening of several retail facilities in various locations.

MS. CARBASHO is a free-lance writer.
© 2003 American City Business Journals Inc.