Monday, March 29, 2010

Grocery Stores Gone Wild

This might sound strange, but the most dynamic sector of Marin's economy has to be grocery retailing. The transformation in this sector over the last few years has been remarkable and is set to continue this year with more new stores opening and - very likely - more old stores closing.

Ten years ago, the grocery scene in Marin was dominated by mid market regional chains such as Albertsons and Bell Markets that operated 15-20,000 sq.ft stores. By 2006 Albertsons had closed or sold all their stores. Also in 2006 DeLano's took over five Marin Bell Market stores, although the ones in downtown Tiburon and Novato have since closed.

Over the last couple of years we've seen new stores from Trader Joe's in Novato and Larkspur, a large new Safeway at Hamilton Marketplace, the discount Grocery Outlet opened in Novato and Paradise Foods took over the old Safeway store at Pacheco Plaza.

And the action is set to continue in 2010. First out of the blocks this year is Mi Pueblo, which opened March 20 in the old Circuit City store in San Rafael's Canal neighborhood. Of all the new supermarket openings in Marin, this one seems to make the most sense, providing a large format grocery store targeted precisely at the local Hispanic market and serving an area that didn't already have such a store.

But grocery retailing will get really wild in the next few months with the opening of two new Whole Foods stores. The first will be a 40,000 sf store in the new Millworks development in downtown Novato, which will open on April 22nd. This will be followed early June by the new Mill Valley store, which will occupy the 23,000 sf ex-Albertsons space at the Alto Center.

The Whole Foods in Novato will no doubt make life tough for other grocers in the local area, in particular those competing at the higher price points, such as Paradise Foods and Harvest Market. The smaller WF store in Southern Marin will pull customers from Tiburon and Corte Madera as well as Mill Valley, so any sales impact will be spread among several existing stores. Whole Foods will also provide some serious competition for the various farmers markets around the county, some of which are already under strain.

If any other grocers want to try their luck in Marin there are several vacant stores available, including those at Fair Anselm in Fairfax, the ex-Delano's in downtown Tiburon and The Square Novato, and Marinwood Plaza. Unfortunately, as the current crop of new markets get established, this list is more likely to get longer than shorter.

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