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Originally published July 8, 2010 at 7:56 PM | Page modified July 12, 2010 at 11:58 AM

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Retail Report

Food trucks in Seattle are hitting some bumps in the road

Some people think food trucks have all the fun, because they often don't pay rent or property taxes and can roam all over the city. But not everything rolls...

Seattle Times business reporters

Some people think food trucks have all the fun, because they often don't pay rent or property taxes and can roam all over the city.

But not everything rolls smoothly for Seattle's mobile food units, something the mayor's office plans to address in the next few weeks with proposed rules meant to make street vending easier and more plentiful.

Some restaurant owners oppose the changes, saying more food trucks would hurt small businesses already brought low by the recession.

One battle for customers is playing out near the Mexican Consulate in Belltown, where a taco truck recently located on private property and struck a serious blow to Deli Shez Café around the corner.

The deli's breakfast business is down 80 percent, according to its owner, Charbel Chalhoub.

"If I'd known before, I'd have bought a taco truck rather than spend money on this where I'm stuck in a lease, and I could move any time," he said.

The grass is not necessarily greener on the taco truck's side, however.

Its profits are just $30 to $40 a day, according to its owner.

Fernando Paz, a former mortgage broker, said he once made a half-million dollars a year but now is so deeply in debt that he is willing to work 12-hour days selling $1.50 tacos and $5 burritos.

Long lines for pulled-pork and vegan sandwiches outside Seattle's popular pig-shaped Maximus/Minimus truck are misleading, said owner Kurt Beecher Dammeier.

"It's certainly not making big profits yet, or maybe ever," said Dammeier, who launched Maximus last year and also owns Beecher's Handmade Cheese, three Pasta & Co. restaurants and Bennett's Pure Food Bistro on Mercer Island.

"There are a lot of advantages you have with a physical location that you don't have with a truck, and there are a lot of costs you have with a truck that you don't have with a physical location," he said. "It's like comparing apples and oranges."

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For one thing, going wherever the people are turns out to be harder than it sounds, Dammeier said.

Take the Fourth of July last year, when the pig parked a block from Gas Works Park.

"A block away was the closest we could get, and a block away from 50,000 people, there were like 20 people" at the truck, he said.

Staffing and licensing trucks is more complicated than running a restaurant, owners say.

Molly Moon Neitzel, whose two Seattle ice-cream shops bear her name, hired five new people to run an ice-cream truck that debuted last month for everything from corporate gatherings to birthday parties and neighborhood hot spots.

"It's been far more of a time-suck and a headache than I thought it would be," Neitzel said. "I'm taking a year off from opening a new store, but I've worked more than when I open a store."

Truck staffers need clean driving records and often require a dispatcher to keep track of the daily route — and, per health- department rules, where customers can use a nearby restroom. Sometimes that means finding new restrooms, and filing new forms, each day.

And that's just one thread in a bureaucratic web that mires food trucks, Neitzel said.

"I needed more inspections to operate a mobile food unit than to open either of my shops," she said. "I've been e-mailing with the health inspector today, because I don't understand all the fees, and I'm a savvy person."

Seattle has 316 mobile food vehicles, many of them hot-dog carts. Only 119 are trucks or trailers, according to Public Health — Seattle & King County.

By contrast, Portland's mobile food carts, trucks and trailers have zoomed from 459 units in May to 579 now, according to the Multnomah County Health Department.

In the next couple of weeks, the Seattle mayor's office plans to take the first steps toward making formal recommendations to City Council for changes to street food rules.

Joe Cohen, who owns Ralph's Grocery & Deli in downtown Seattle, has told the city loosening the rules is not a good idea.

"It's bad timing for this," Cohen said. "Retail is struggling now, with few exceptions, and we don't need to have someone come along and take another slice out of the pie."

For every job the city creates with new street-vending rules, a job will be lost at an existing bricks-and-mortar location, he said.

The city's plan to bar street food vendors within 50 feet of restaurants or other food businesses is not good enough, he and others say.

"I was really torched" at a recent meeting of the Capitol Hill Chamber of Commerce, said Gary Johnson in the city's Department of Planning and Development.

Owners of low-cost restaurants in particular, he said, "were outraged that the city is working to encourage [what they consider] unfair, low-overhead competition."

Higher-fare restaurants are less threatened, although that could change as food-truck owners start eyeing bricks-and-mortar spaces.

Joshua Henderson, the chef and owner of Skillet Street Food, which sells $13 and $14 gourmet hamburgers around town, already doubled sales by increasing the amount of time his truck spends on catered events rather than street corners.

After three years in the food-truck business, Henderson said, he hopes to open a diner next year on Capitol Hill.

— Melissa Allison

Tidbits

Seattle-based Nordstrom posted a better-than-expected increase in sales at stores open at least a year for June. Nordstrom said it benefited from a later start to a half-yearly sale, which ran May 26 to June 6. Last year, the event began May 20. Nordstrom's monthly same-store sales rose 14.1 percent, beating a 9.6 percent increase predicted by Wall Street.

The company's direct business, which includes its website, remained a bright spot, with sales up 66.3 percent from a year ago. Sales at established full-line clothing stores rose 12.7 percent, while the off-price Rack division, facing tougher comparisons with last year, posted a 0.6 percent increase. For May and June combined, Nordstrom's same-store sales were up 8.9 percent from a year ago. AM

Everett-based Zumiez, which sells skateboard- and snowboard-inspired clothes, shoes and accessories at 389 stores, said its June same-store sales rose 10.9 percent, better than the 8.5 percent increase that Wall Street expected. A year ago, Zumiez posted a 19.3 percent decrease in June same-store sales. — AM

Costco Wholesale reported June same-store sales of 4 percent, driven by a 14 percent increase at its international stores. Sales rose just 2 percent at U.S. stores open more than a year. Earlier this week, Goldman Sachs reduced its stock-price target for the Issaquah-based warehouse club from $66 to $61 a share. Its stock closed Thursday at $55.71; it has traded between $44.37 and $62.12 over the past year. MA

The board of TC Global, which runs Tully's Coffee, has elected Walter Schoenfeld as a director, filling the vacancy created by the June retirement of Tom O'Keefe, Tully's founder and former chairman. Schoenfeld is chairman of a private investment company called the Schoenfeld Group and was vice president of the Seattle Sonics parent company and a general partner in the Seattle Mariners Baseball Club. The board also elected as a director Scott Anderson, a principal of the investment and advisory firm Cedar Grove Partners. — MA

Retail Report appears Fridays. Amy Martinez covers goods, services and online retail. She can be reached at 206-464-2923 or amartinez@seattletimes.com. Melissa Allison covers the food and beverage industry. She can be reached at 206-464-3312 or mallison@seattletimes.com.

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Retail Report is a look at the trends, issues and people who makeup the dynamic and versatile retail sector throughout the Puget Sound region. Every Friday with Melissa Allison and Amy Martinez. Send tips or comments to mallison@seattletimes.com or amartinez@seattletimes.com.

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