Tuesday, March 25, 2008

Fourth Street, San Rafael

Downtown San Rafael has the honor of being the largest main street retail location in Marin County. Fourth Street is the commercial and retail heart of the city and contains an eclectic mix of retail stores, eateries and services, together with civic, cultural and entertainment uses. The retail profile of the downtown area is diverse and constantly changing. Fourth Street provides the start-up retailer with a decent amount of pedestrian traffic at rents that are reasonable by Marin standards. Some retailers get the right recipe and survive, while others fail. The downside to Fourth Street is that it can be a bit sleazy, mostly at the eastern end near the freeway and the bus station. Fast food restaurants and Hispanic convenience stores cluster around this end of the street. Think seedy bars, tattoo artists and “massage” parlors, clustered along Fourth and the adjacent side streets and on the upper levels above the stores. There is plenty of (metered) car parking, both on-street and in a couple of garage structures on the south side.
At "A" street is Courthouse Square, where two large office buildings are set back from the road behind a grassy square. Next to the square is San Rafael Town Center, which includes a 5-storey apartment and office development that was built around two years ago. It also has restaurants on the street level set around an outdoor area called the City Plaza. This area seems to be the busiest part of the strip, although there are still a few vacant stores on either side of the street. Further west the vibe changes. There are restaurants, some with outside seating, a few boutiques, antiques and home furnishing stores. It’s almost genteel. Many shoppers on Fourth Street are local residents and workers. Others visitors come from elsewhere in Marin to shop at specific well-known stores, such as Scandinavian Designs or the Bike Shop. I’m guessing that there are quite a few browsers as well. If you haven’t been there for a while, I would recommend a visit. There are many independent stores that you won’t find elsewhere in Marin. I didn’t have enough time on my visit to go in all the stores, so I’ll be heading back soon. This time I’ll schedule my visit around lunchtime to sample a meal at one of the restaurants.

Friday, March 21, 2008

News round-up

Borders for sale?: Barnes & Noble may buy the rival book chain.

Next time you go to Best Buy or Home Depot, be sure to haggle.

And next time you want to by a hoodie or track pants, don't go to Gap or Abercrombie & Fitch - go to Walgreens. They're introducing a clothing line called Casual Gear.

Handbag heaven: The Village at Corte Madera has signed up Tumi and Kate Spade for new stores. The Kate Spade retail brand will replace Sigrid Olsen. Both brands are part of the Claiborne group.

Friday, March 14, 2008

Novato Grocery Wars

For many years the citizens of Novato have bemoaned the lack of good retailers in their town. Well things are certainly changing now, at least in the grocery sector, where two major supermarkets are under construction, a Trader Joe’s recently opened, Costco is expanding and a discounter called Grocery Outlet is planning to enter the market.

So is there room for all this additional supermarket space – or will the massive increase in competition force some existing grocery stores out of business?

In the incumbent corner, the supermarkets currently serving the community are:

Safeway, Novato Fair: 42,800 sq.ft
DeLano’s, The Square: 30,000 sq.ft
Harvest Market, San Ramon Plaza: 25,000 sq.ft
Costco, Vintage Oaks: 40,000 sq.ft (food section)
Safeway, Pacheco Plaza: 22,500 sq.ft
Trader Joe’s, The Village: 12,100 sq.ft

Total 172,400 sq.ft

Population 60,000
Sq.ft per Capita 2.9 sq.ft

By 2009, the following new additions will be open:

Safeway, Hamilton: 55,000 sq.ft
Whole Foods, Novato: 42,500 sq.ft
Grocery Outlet, Novato: 25,000 sq.ft
Costco expansion: 10,000 sq.ft (est. food section)

Total (existing & new) 304,900 sq.ft
Population 61,000
Sq.ft per Capita 5.0 sq.ft

Going from 2.9 sq.ft per capita to 5.0 sq.ft per cap is a major increase, which is certain to have some lasting impact on the existing food retailers in Novato. There isn't going to be a lot of population growth to support this additional floor space, so retailers are going to have to fight hard to grab market share.

The table below details my estimate of how grocery sales will be affected by the new competition. In total, annual supermarket sales will increase from $128.4 million to $164.7 million. This means supermarkets in Novato will hold on to a bigger share of resident spending on food by taking share from supermarkets outside Novato and from non-supermarket channels, such as convenience stores and specialty food shops.

Because of the increased floor space, the average trading level per square foot will decrease by 22% overall. Individual stores will be impacted to different degrees, depending on their individual competitive strengths. But it looks like some existing supermarkets will see their sales fall by 30% or more.

I’ve also assumed that the Safeway at Pacheco Plaza will not be replaced by a supermarket, but if one were to open it would really struggle to establish itself in this market.

Monday, March 10, 2008

Strawberry Village

Strawberry Village is located on the eastern side of Highway 101 in the Strawberry suburb of Mill Valley. The center is anchored by a 45,000 sq.ft Safeway supermarket and also contains around 120,000 sq.ft of externally-oriented space in several separate buildings.
Originally opened in 1964, the center was owned by the University of California until 2004, then sold and redeveloped. Safeway expanded its store by 15,000 sq.ft and a new main street and plaza were added. The design is Tuscan-inspired, which means red tiled roofs, lemon trees, terracotta pots, oak beams and one or two towers and false turrets in shades of yellow and burnt umber.

The lease-up and opening of stores in the Piazza area has been slow; the last two remaining units are still waiting fit-out nearly two years after construction was completed. The focus of this area was always going to be the eateries, and the two that have opened so far seem to have hit the mark. Pizza Antica is a small-chain family restaurant that has a big open high-ceilinged dining room that gets very noisy. La Boulange is a Bay Area chain of 8-9 French bakery/café/pastry shops. When the weather is good the Plaza is a great place to sit outside for breakfast or lunch. Other eateries at the center include the ever-popular Thep Lela Thai, Harmony, which specializes in Dim Sum, High Tech Burrito, Pasta Pomodoro, Sushi Gourmet and Rain Tree Café. At the southern edge of the center are In-N-Out Burger and Round Table Pizza. There are two separate parts to Strawberry Village. The northern part is the largest section and contains Safeway and all of the remodeled components. The southern part is smaller and comprises mostly financial and professional services. Ideal Stationers is an old-style office supplies store that has been at the center forever and is worth seeking out at the southern end of the center for its eclectic merchandise. The most visible new store at the center is Smith & Hawken. The iconic garden & patio furniture chain originally started trading from a small store in downtown Mill Valley and now occupies an eye-catching 10,000 sq.ft unit with enough room to show its range of adirondaks, firepits and outrageous gazebos. Other stores that are long term tenants at Strawberry include Wolf Camera, Arch Rival, which has a strong following as the place to go to get tennis shoes professionally fitted. World of Sound specializes in high-end home theatre and hi-fi installations. Patrick James West Coast Classics has classic outfits from the likes of Corneliani, Bills Khakis, Tommy Bahama etc. Among the newer stores the common theme is catering to the higher end of the market. Given that the local market is affluent Tiburon & Mill Valley, this is a sensible approach. Nancy Koltes at Home is a small store that showcases the designer’s linens.Nicole Gray & Co. mixes beauty products with gifts and homewares. Other new stores that seem to have found their niche include Woodlands Pet Food & Treats which, in addition to all the pet products also offers dog training and adoption clinics. The adjacent Monkey Business toy store stocks quality products of the kind that all parents would want to buy for their kids if they had the budget. The Spanish Table's niche is all things Spanish, including foods, wines and cookware.Stores that always seem to be busy include Starbucks, New York Bagels (aka the slowest bagel store in the west) and Woody’s frozen yoghurt place. Other stores always seem to be empty, especially the poorly-located Jos A Banks, which sits by itself at the back of the center. Safeway is usually very busy. It was remodeled in 2005 to the latest "lifestyle" format and extended to include bonus services, such as the pharmacy and hot food counter.
The two new stores that are yet to open at the center are Asqews Grill, which is a small Bay Area chain specializing in skewered and barbequed dishes, and Lavande Spa & Boutique, which promotes itself as offering an interesting combination of manicures, pedicures and womens shoes.

Tuesday, March 4, 2008

The Cove Shopping Center

The Cove is a neighborhood shopping center located just to the east of Strawberry, where Tiburon Boulevard meets Blacfkield Drive. The location is well-placed for serving the surrounding residential suburbs and also for capturing trade from passing traffic going to and from Tiburon.
Anchoring the center is a nicely-presented DeLano's IGA supermarket of approximately 22,000 square feet, which took over the space from Bell Markets at the end of 2006. In addition, some 12-13 specialty shops form a U-shape around the car park.
Many of the stores at the center are well-established local favorites. Sweet Things cafe and bakery, which also has an attached homewares store, makes the best cakes in the County. Foodniks is a more recent addition to the center, having taken over the old Let's Eat deli, and offering fresh deli items and pre-made gourmet meals.
Bud's ice cream parlour and Blockbuster are the other stores on the south side of the center.
On the north side, Milano's restaurant is a well-loved local institution and always does good business. The attached wine bar is also great for a quiet drink. Also on the north side is Champagne salon & day spa, a frame shop and a physical therapist.
The eastern side of the center includes Hearts & Flowers, which is a cafe/florist, Blinds & Designs, a dry cleaner and UPS store.

When I lived in this neighborhood I really appreciated having the Cove as my local retail center. For a small center, it packs in a lot - including the everyday essentials and treats for special occasions.