The turbulence stemming from President Trump’s tariffs has posed significant challenges for new restaurant ventures in New York City, notably for establishments like the renowned Zabal family’s sweet shops.
Currently, candy prices remain stable, aligning with other popular dining spots. It seems that food entrepreneurs are absorbing increased costs amid ongoing tariff uncertainties and various obstacles.
Sasha Zabar, preparing to launch Gray Candy, a global candy store adjacent to Grace, a famed ice cream and hot chocolate shop on the Upper East Side, mentioned that the unpredictability surrounding tariffs has inflated their budget, compelling them to scramble for alternative solutions.
Moreover, this situation is aggravated by rising expenses due to natural calamities, from avian flu to drought.
“Ultimately, tariffs posed significant threats and concerns, yet decisions were stalled since they raised costs primarily due to the uncertainty,” Zabar explained.
This uncertainty, of course, leads to increased expenses.
For instance, Zabar expressed, “We had to miss a great shipping opportunity and instead sail cargo, which tripled our costs.” Many of his candies originate not just from Japan, but also from various European countries like Sweden. Some shipments he ordered pre-tariff saw price changes while he was still en route.
He opted to hold off on additional purchases, but the delay meant shifting from cooler to warmer weather, making it impossible to ship candies. Consequently, he had to resort to air freight, tripling his expenses.
Zabar also decided against custom packaging from China because of the tariff unpredictability. His orders weren’t substantial enough for a U.S. customizable factory.
“The U.S. lacks adequate capacity for producing small custom packages,” Zabar noted, highlighting the reliance on manufacturing from China, Vietnam, and India.
Now, he’s exploring new, affordable options in Dubai and other Middle Eastern locations, but ordering remains tricky without assurance of quality.
“I haven’t adjusted retail prices so far, but it’s a consideration. If we can’t identify savings elsewhere, we’ll inevitably need to,” Zabar said.
Even earlier, “chocolate and egg prices were skyrocketing,” he recalled, mentioning that costs for items like French molds have surged by 10% due to tariffs and impacts of avian flu on egg prices, alongside droughts affecting cocoa.
“We’ve seen clear price hikes in materials and packaging. It feels like a setback just before launch,” Zabar remarked.
That said, he concluded this means operating costs remain in line with other high-end candy retailers.
Gray Candy features ingredients sourced from Sweden, the Netherlands, Spain, France, Canada, the U.S., and Türkiye. Zabar plans to set a price of $19 per pound for bulk candies, with handmade chocolates to follow, though pricing specifics are still in flux.
The store at 1266 Madison Avenue is set to open Thursday.
For comparison, a Glace Candy spokesperson noted Bon Bon, another premium candy shop, sells for £1, while Dylan’s Candy Bar and Little Sweet Treat both charge $19 and $19.40 respectively.
Gray Candy draws inspiration from Scandinavian, European, and Japanese treats, embodying Zabar’s nostalgic childhood memories of Millionaire Deli, the current site of Grace.
The store’s diverse offerings include small batch chocolates, sour gummies, locally sourced fruit candies, and marshmallows inspired by Grace’s signature hits.
The design of Gray Candy, which connects to Grace through a charming arched passage, allows guests to select candies to pair with flavors like brown butter vanilla, crème brûlée, and Meyer lemon for a unique, customized experience.
With tariff costs fluctuating daily, Zabar described the experience as “eye-opening,” highlighting how minor adjustments can lead to substantial price changes.
Glace shop items aren’t cheap—sundaes start at $7.50 for a scoop—but Zabar hopes the prices remain reasonable and accessible.
