Showing posts with label DeLano's. Show all posts
Showing posts with label DeLano's. Show all posts

Tuesday, November 30, 2010

DeLano's closing in Tiburon and Mill Valley

The Delano's grocery chain, which has struggled to maintain market share in the face of new competition and declining consumer spending, has folded. The two Southern Marin stores, at Tamalpais Junction, Mill Valley and The Cove, Tiburon, are expected to close in December. As reported today in the IJ, it looks like the Fairfax store will remain open but will drop the DeLano's name. The chain's three San Francisco stores are also closing.

DeLano's presence in Marin began in 2006, when they took over five Bell Markets. Poor performance led to the closure of the DeLano's market in downtown Tiburon in February 2009, and the store in Novato closed the following August.

The two Southern Marin stores have likely seen a sales decline following the opening of Whole Foods at the Alto Center in Mill Valley.  The Fairfax store benefits from little local competition, although that would change if a market is found by the new owners of the Fair-Anselm Plaza.

So what now for the closed stores? According to Fresh & Easy Buzz, There are a few small-format grocers currently looking to expand in Northern California, including Fresh & Easy, Henry's Farmers Market and Sprouts Farmers Market. Any of these would be good new additions to Marin County. Local grocer Mollie Stones may also be interested, although the Southern Marin sites may be considered too close to Mollie's existing stores in Sausalito and the Bon Air Center.

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.

Tuesday, October 20, 2009

Weekly news update

A few stories from around the County this week...

DeLano's in Tam Valley is to get its own Post Annex.

The Marin Store is a new on-line store promoting food, fashion, art etc created in Marin, or made by companies based in Marin.

Peet's proposed new outlet in Sausalito has to pass the "no chains" rule that blocks formula retailers from locating on the waterfront.

Restoration Hardware relaunched it's Corte Madera store last week with a cocktail reception. The store shall be know from here on as something like The Gallery at Restoration Hardware. To emphasize the point, they've hung curtains outside the entrance (see photo). The merchandising matches Resto's recent strategic decision to position themselves at higher price points, and the store has some impressively huge sofas, industrial chic tables and massive metal floor lamps. There's also a new children's section.

Finally, as the opening of the new Paradise Foods at Pacheco Plaza draws near (planned for November 2), I couldn't help but notice a very candid quote in the IJ from the owner, David Gilmore, who said of the new store, "I had been kind of talked into doing this at the start". And while he "feels really good about it now", let's hope the people of Novato feel good about paying top dollar for the store's premium product.

Thursday, August 6, 2009

Novato DeLano's to close

The Novato Grocery War claimed it's first victim yesterday, with news of the closure of DeLano's at Novato Square. DeLano's was always the weakest of the incumbent grocers in Novato, so no major surprise that the store was getting hit by the slowdown in consumer spending and the new competition from the Hamilton Safeway , Trader Joe's at The Village and Grocery Outlet.

Despite the DeLano's exit, there are more battles ahead for Novato's markets, with Whole Foods and Paradise Foods scheduled to open within the next few months. I wouldn't be surprised to see either of these stores postponing their opening given the current state of the economy, and in particular a lot of negative press about the viability and impact of the Whole Foods / Millworks development, which has switched from condos to apartments after only 2 of the 124 units were sold.

But if the stores open as planned, the underlying problem will remain - that with these new stores, Novato will have too much grocery space for its population, and the grocery war will surely claim another victim.

Friday, April 17, 2009

DeLano's Market: don't buy new, buy recycled!

Great to see that DeLano's Market is doing something to help the environment. "We're Going Green" proclaims their full page ad in the local newspaper.

"...it takes less energy to manufacture a recycled product than a brand new one. So if you buy our recycled products, you'll help energize a market and conserve energy along the way."
One question Mr DeLano: exactly which part of the chicken is recycled...?

Tuesday, April 14, 2009

Up the Junction

Tam Junction is located in the southern part of Mill Valley, where the Shoreline Highway intersects with Almonte Blvd. It's a busy junction, especially on summer weekends as San Franciscans pass through on their way out to Stinson Beach, and it's home to 20-30 commercial and retail businesses that make a living from the passing traffic and from the local Tam Valley community.
It's not the most glamorous retail destination in Marin, but it has it's own character. The Arco station right on the intersection has the cheapest gas in the county, and is always busy. There's the iconic Oriental Rug House, famous for its never-ending 'going-out-of-business' sale. Funnily enough, now that there's a recession, the Rug House is no longer going out of business. Perhaps the marketing pitch doesn't work when everyone else is going out of business too.
Tam Junction has no pretensions. It's not trying to be a tuscan village. It doesn't pretend to want people to walk around or take any pleasure in the surroundings. It's a good old American strip mall, where you drive up to the store front, get what you came for and drive off again. It's got a Subway, Starbucks, Dominos, chinese food, hair salons, nail salons, beauty salons, massage parlors, more massage parlors and yes even more massage parlors. There's a bike shop, a surf shop, a dentist, dance studios and karate studios. There's a Walgreens and a DeLano's market, dog kennels, building supplies, a coin store and a psychic. There's piles of trash, vacant lots, signs everywhere and the sky is full of wires and pylons. Enjoy the photos:

Thursday, February 5, 2009

DeLanos vacates downtown Tiburon

Following the announcement of the closure of the DeLano market in downtown Tiburon, the burning question is what is going to happen to the vacated space. Does the DeLanos exit, which was as a result of weak sales, signal that there just isn’t enough of a customer base to support a supermarket? Or is this a potential opportunity for an operator that is more in tune with local residents' needs?

There’s no doubt that DeLanos was a poor performer. There were never more than a handful of customers in the store whenever I went in there. And driving by I always noted plenty of empty space in the car park. Comments from locals had the same theme: nice staff but average selection of merchandise and high prices. Customers appeared to use the store for top-up shopping – picking up a few items in between their weekly shopping expeditions to Safeway or Costco. The store always came off second best in comparison with the adjacent Boardwalk Market, which is also expensive, but wins on quality and selection of merchandise.

Adding interest to the story is the situation at the Boardwalk Market, with plans announced last year to kick out the current tenant in 2010, renovate the space and install the operator of Kentfield’s highly-rated Woodland Market. Barring any signed agreements or contracts, Woodlands must surely be considering now whether they should take the DeLanos space instead. That would leave the Boardwalk in place as an established competitor, which is a risk. But alternatively, if Woodlands does not take the DeLanos space, it leaves open the possibility that another quality operator will. Adding spice is the fact that both the Boardwalk and the DeLanos site are owned by the Zelinski family, which also owns most of downtown Tiburon .

The main questions that an operator looking at the DeLanos space will have to ask is whether the local market is big enough to support my store, and can I grab market share from the competition and hold onto it. In terms of market size, Tiburon is certainly big enough. There are approximately 11,000 people in Tiburon/Belvedere. Average household incomes are amongst the highest in the nation, at close to $300,000. Spending on food to take home is estimated at over $10,000 per household, so with 4,700 households there is approximately $50 million of retail sales available for supermarkets and other food stores. A 20,000 square foot market making sales of $600 per square foot, or $12 million per annum would make a tidy profit. That equates to a market share of 24% ($12 million out of $50 million), which is definitely achievable for a good operator.

In terms of competition, Safeway at Strawberry is the main player. The store is not in Tiburon, but everyone passes it on the way in and out of the peninsula. The Boardwalk has no doubt some loyal customers, but it isn’t that great and will lose sales to a top tier operator located directly across the street. DeLanos at The Cove is a minor player.

The taker of the DeLano box also needs to think about the competitive risk in the shape of new players entering the market, most directly in the shape of Woodlands opening at the Boardwalk in 2012, plus Whole Foods at the Alma Center in Mill Valley, which is easily accessible for Tiburon folks. To a lesser extent, Trader Joes will pull some Tiburon shoppers to its new store at Larkspur.

Current market conditions dictate that nothing is likely to happen immediately. In better times I would not be surprised to see a strong Bay Area operator such as Draegers of San Mateo seizing an opportunity like this to enter the affluent Marin market. But it does not have to be an “up-market” operator. Rich people can be notoriously cheap. A value player such as Fresh & Easy would do just as well. Unfortunately, although largely unheard of in the region, it would not take people long to work out that Fresh & Easy is a chain retailer, which makes it about as welcome in the community as a uranium reprocessing facility.

Watch this space.

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.

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.

Thursday, February 14, 2008

The Square, Novato

Maybe not the prettiest bit of retail real estate in the County. Let's just be generous and say The Square is a modest and functional "no-frills" neighborhood center, located on Novato Boulevard just west of downtown.
DeLano's and Longs Drugs provide the anchors, with a selection of specialty shops that are... well "convenient" I guess is a good word.
Tagliaferri's is the most interesting store - an italian deli where you can get a coffee and some salami.
There's also a few eateries - Villa Roma, Cafe Bangkok and Henrys Burgers.
And there's a fitness center and a few vacant stores.

I didn't hang around long enough to sample anything.

Wednesday, January 30, 2008

Fair-Anselm Plaza: needs something Fresh & Easy?

Seeing the news about Fresh & Easy opening stores in the Bay Area started me thinking about where they might find a site in Marin. One place that comes to mind is Fair-Anselm Plaza, which I had a quick look at when I was in Fairfax last weekend. This is a grocery-anchored center which lost its grocer when Albertsons closed just over a year ago. On the face of it, a large vacant retail site in affluent, anti-development Marin should be snapped up pretty quickly, right? Obviously Albertsons couldn’t make a dollar there, but then Albertsons isn’t exactly the world’s leading retailer.

As the name suggests, Fair-Anselm Plaza is located between Fairfax and San Anselmo. The center straddles Center Boulevard approx 0.5 miles from Fairfax, with the vacant grocery store on the north side of the road and a strip mall on the south side. Each side has adjacent parking and there’s a crossing for pedestrians right outside the grocery store door.

The first thing you notice is what an ugly sight the grocery store is. It’s an old (1970s?) box, which looks particularly bad when you drive by on Sir Francis Drake, which borders the north side of the store and is slightly elevated, giving you a great view of the nasty concrete walls and roof.


The site itself is nicely located, with great exposure to passing traffic and easy access. Despite the closure of the anchor store, most of the other tenants are still trading, so there’s clearly a customer base remaining for the center. Other stores that draw people to the center include the US Post Office and Iron Springs Pub & Brewery. There’s also a health club, video store and cycle shop.

The center’s primary trade area includes the whole of Fairfax, Sleepy Hollow and parts of western San Anselmo. Woodacre, San Geronimo and Lagunitas make up a smaller secondary trade area. The map below shows these areas. Total population probably hasn’t changed much since the last census in 2000, when 18,000 people lived in the primary and 4,000 in the secondary sectors. Total trade area retail spending on food to take home is estimated at $52.6 million in 2008.


An estimated 65% or $34.2 million of this spending is directed to supermarkets, with the remainder going to independent food stores, convenience stores, farmers markets etc. The majority of this $34.2 million is currently shared between five supermarkets: Delano’s and Good Earth in Fairfax, Safeway at Red Hill, Andronico’s and Quick ‘n Easy in San Anselmo, and United Market on the eastern side of San Anselmo.

A 10,000 square foot Fresh & Easy supermarket at Fair-Anselm should be able to capture a market share of approx 10%, or $5.3 million of trade area food spending. Add on another 15% for sales to people living beyond the trade area, and 10% for sales of non-food items (alcohol, household consumables etc) and total store sales would be approx $7 million per annum, or $700 per square foot, which is a viable sales intensity for a small supermarket like this.

Fresh & Easy has been pushing its green credentials, with organic produce and support for local communities. This should please the eco-warriors of Fairfax. If Catlin Properties, who are believed to be buying the Plaza, can make it work, it’ll please everyone to see the old Albertsons store demolished and something less nasty built in its place. There might even be room for some additional stores. Starbucks, anyone?

Saturday, January 26, 2008

Fairfax

We took a drive up to the little town of Fairfax today. Here are a few photos of some of the shops in the village center. Note the sandbags around some of the doors: there was a flood warning last night, but it looks like the water levels in the creek fell before any damage was done.







Fairfax is approx 3 miles northwest of San Anselmo and is a great little town – well worth a visit for the local hiking, cycling or just to pass an enjoyable hour browsing the local stores in the village.



The main retail strip is easily walkable and is centered on the intersection of Broadway and Bolinas Road. Here you’ll find plenty of cool local shops, with practically no chain stores to spoil the fun.




People here take their cafes, bars and eateries seriously and there’s a great range to choose from. Favorites include Sorrella, Barefoot CafĂ©, FairFix CafĂ©, Koffee Klatch, Siam Lotus, Perry’s Deli, Coffee Roastery, Grillys and CafĂ© Lotus.



Other stores we liked are: Culture Shock, Fairfax Variety store, Good Earth organic market, Bookbeat bookstore and cafĂ©, Tela D organic clothing, The Potting Shed, For Paws – an organic pet grocery and boutique and Sherman’s General Store.





In the evening there's live music at Neve’s, 19 Broadway or Peri’s Silver Dollar.


The main supermarket is DeLano’s IGA on the western side of the town. The former Albertson’s supermarket at Fair Anselm Plaza, approx 0.5 miles east of the town center, is still empty after Albertson’s moved out last year.





View Larger Map