Regional Profile – Sabrett Hot Dogs, New York, Part 2

The New York Pushcart Biz

How can a company like Sabrett grow to selling 35 million pounds of hot dogs annually, when the most visible face of their customers are the lowly push carts in New York City?

Thinking of that business as “lowly” is our first mistake.  With thousands of push carts in NY, the city quit issuing licenses back in the 70’s.  They charge an annual rental fee for the sidewalk space.  Are your ready for this number?  Prime sidewalk space in NY can go for over $200,000 annually.  That’s right.

Not only that, shell out all that dough, and the city will still set the maximum price you can charge for a hot dog.  Exceed that price, get reported, pay a hefty fine.

Nevertheless, it appears to happen, you hear tourists tell tales of the $20 street hot dog.  Probably urban myth.

The carts themselves go for anything from $1000 to $15,000 or more, depending on condition and how well they are equipped.  Plus you have to find a place to park it at night, which can run another $250-$300 a month in Manhattan.

So let’s look at the math.

Say you have a semi-prime corner for $100,000 a year to the city, or $8,300 a month.

You purchased a cart for $10,000 and took out a five year note at 6% interest, your payments are $200 a month.

Now you’re nearly at $9,000 a month before insurance,  buying supplies, paying yourself, employees.

Suppose you work 5 days a week, 6 hours a day, 30 hours.  Suppose the city says you can’t charge more than $2 for a dog.  In the 120 hours a month under that scenario, you’d have to sell 75 hot dogs per hour just to pay your license, cart payment, and parking!

Oh my.

The New York push cart business is highly fractionalized.  A more interesting business model can be found in New Orleans, “Lucky Dogs.”   They have the exclusive license to sell street food in the tourist-laden French Quarter.  The less than stellar hot dogs sell for over $4, or at least they did when I moved out of New Orleans in 2007.  Now here’s the rub.  The company employees mostly ‘down on their luck’ folks as vendors, and pays them on a straight commission!

If you haven’t experience Lucky Dogs first hand, you may have heard about them in the best selling book “Confederacy of Dunces.”

If you want a first hand account of what it might be like to work for Lucky Dogs, check out this yarn of mine from several years ago.

The push cart business isn’t for me, seems like an awful lot of work.  But man oh man I am glad they are around – all over the country.  Hard for me to pass one by without grabbing a loaded up dog.

Not discouraged?  Buy a cart here.

Sabrett Hot Dog Cart

(Ed. Note – Marathon Enterprises, Inc., furnished sample foods for this series).