Thursday, May 15, 2008

Breaking News: Safeway Opens its First Small-Format 'The Market' Grocery Store Today in Long Beach, California

Pleasanton, California-based Safeway Stores, Inc. held the grand opening of the retailer's first small-format grocery store today in Long Beach, in Southern California.

It's the first of a number of the small-format stores, named "The Market," Safeway plans to open in California, and elsewhere in its market regions.

The Long Beach store incorporates the "Vons" logo along with "The Market" store name in text. The idea behind doing that is to create some co-branding credibility for the new format, according to Rojon Hasker, the president of Lifestyle stores and new concepts for Safeway.

As we reported some months ago, Safeway has been working on developing "The Market" small store format since last year.

Fresh & Easy Buzz and others didn't anticipate the first stores to open until at least June. However, since the Long Beach store is in a converted Vons supermarket Safeway already operated, the time-line to getting it renovated and open was faster than anticipated.

The small-format "The Market" grocery store is 15,000 square feet. It contains a selection of basic grocery items, fresh foods and fresh, prepared foods.

As we reported months ago, Safeway has owned a restaurant named Citrine in Redwood City in the San Francisco Bay Area for some time. Citrine's full name is "Citrine New World Bistro." The grocer uses the restaurant and its chefs to create fresh, prepared foods for Safeway's Lifestyle format supermarkets, and now the small-format "The Market" stores as well.

The fresh, prepared foods in "The Market" were developed at Citrine restaurant as we previously reported, and carry the brand name "World Cuisine". Offering "world cuisines," as in Citrine New World Bistro, is the positioning and theme of the restaurant, so the fresh, prepared foods brand names fits that concept for Safeway.

Safeway also haws been expanded its "Signature Cafe" fresh, prepared foods brand in its Lifestyle format supermarkets over the last few months. Many of the prepared foods products under the "Signature Cafe" brand also were created at Citrine.

As Fresh & Easy Buzz reported previously, Safeway plans to open up to an initial four of "The Market" small-format grocery stores in the San Francisco Bay Area. Originally the timeline was to start opening the stores this summer, beginning in the South Bay Area near San Jose and Redwood City, where the Citrine restaurant is located.

Safeway's Rojan Hasker wouldn't confirm or deny that timeline but did say another "The Market" store would open at another location later this year.

Hasker also added Safeway plans on converting a number of its Safeway Supermarkets that it's not converting to its Lifestyle format into "The market" stores, saying about 25 currently could be on the table to convert to the small format grocery and fresh foods grocery markets.

Safeway also plans to build new locations for "The Market" stores, although we haven't yet been able to get the specifics on where and when. Hasker does confirm it's part of the grocery chain's plan however.

Safeway's first small-format grocery and fresh foods store opening in Long Beach in Southern California adds an interesting element to the region's competitive environment. Although Safeway says its small-format 'The Market" isn't designed as a competitive salvo to Tesco's Fresh & Easy Market small-format grocery and fresh foods stores, it essentially is.

Of course, Safeway won't open as many stores at the rapid pace Tesco has. After all, it's the leading food retailing market share grocer in the Western U.S. and operates hundreds of supermarkets in California, Arizona and Nevada where Fresh & Easy stores are located.

For Safeway, "The Market" is part of a multi-format strategy, while Fresh & Easy currently is Tesco's single-format strategy in the U.S.

None-the-less, Safeway's small-format stores will put some pressure on Fresh & Easy.

Additionally, Wal-Mart plans to open the first of its Marketside small-format grocery stores in the Phoenix, Arizona region soon. Based on information from our sources, the first store could open as early as next month, and likely no later than August.

Summer hasn't officially started yet. But the small-format grocery retailing scene is starting to "heat up" anyway. Stay tuned.


Anonymous said...

The Market doesn't work for me. I used to walk across the street to this store to pick up all the essentials I needed. I tried going there today, opening day of the new format, and it had less than half of the things I needed. They did a great job remodeling the store, but it's almost totally useless to me now. If I wanted this kind of store, there's a Trader Joe's, a Whole Foods, and Olive's (a locally-owned small boutique grocer) within three miles of each other.

I hope enough people in the area vote with their wallets so that Vons makes this a conventional grocery store again. I'll be taking my business to the Ralphs on 4th Walnut or the Albertsons on 2nd and Marina.

OakMonster said...

I drove by the Market the other day and I was wondering what that was. Now I know! Probably should go check it out this weekend.

Anonymous said...

What is the address of this store?

Fresh & Easy Buzz said...

Safeway Stores,Inc.'s Vons' "The Market" is located on East Ocean Blvd. in Long Beach.

Anonymous said...

What a Beautiful store. Safeway has done a subperb job with this concept. Fresh & Easy should be "crying" if this roll out further....

Carrie said...

I think its telling that the soda and chip aisles have more selection than the produce section.

the market doesn't work for us either. We generally do not buy pre-prepared foods, and we look for good prices on essentials. The old Vons had a decent selection of mid priced essentials.

Now its a lot of very expensive non-essentials, and raised prices on the basics. The prices are just awful compared to Trader Joes, and Whole Foods is actually economical compared to this place!

Pity, because we did most of our shopping at the old Vons because it was convenient and the prices were good.

Oh well, we will be voting with our $$. We are fortunate that are many grocery choices in this area that put "the market" to shame.

Fresh & Easy Buzz said...

Carrie, thus far we've only had a chance to do a price comparison on a small market basket of items in "the Market by Vons" compared to Fresh & Easy and Trader Joe's (Haven't had a chance to do Whole Foods yet.)

What we've found in doing so is that yes, indeed, the prices on the items we compared at "the market by Vons" to Trader Joe's and Fresh & Easy are higher.

We compared some Safeway store brand basic grocery items to similar store brand items (dry grocery) at a Fresh & Easy and TJ's nearby. The items from "market by Vons" were higher.

We also compared a couple fresh produce items...higher as well. Although, since Fresh & Easy's and TJ's produce is packaged, there are some qualitative differences to consider when comparing.

We did compare a couple cheese items, and "the market by Vons" was a bit lower than TJ's on those and about the same with F&E.

We plan on doing a more comprehensive price comparison soon as time permits.

But thought you might like this input per your observations.

Carrie, about how much more, say in a percentage basis, are you finding prices at the "market by vons" to be over Whole Foods and Trader Joe's.

Any others shopped "market by Vons" and can add to the discussion on prices?

Jon said...

about how much more, say in a percentage basis, are you finding prices at the "market by vons" to be over Whole Foods and Trader Joe's.
Their fresh meat was noticeably more expensive than equivalent cuts @ Whole Foods, probably 15-20% more.

With the exception of the bakery which has a nice selection of quality, baked on premises, breads at fair prices the concept falls completely flat for me.

As Carrie noted (I'm her husband) we buy almost no convenience / prepared foods. The selection of staples at that store has been severely curtailed. Want dry beans?
They have Pinto Beans thats all.

Milk? Sure but don't expect much in the way of choice on price or brand.

Their pricing on safeway/vons branded items is still the same as at conventional Vons but they have essentially eliminated many of the low to mid end items from their shelves altogether at "the market".

Produce selection is quite limited as well. They did not even have brown onions at all when I stopped by there today. Adding insult to injury I asked the veg guy if they had brown onions and he pointed to some (prominently labeled) sweet onions and said those were "brown" onions.

As many have already noted here we too will be voting with our wallets and shopping elsewhere.

Everyone we've talked to in the neighborhood so far seems to be similarly disappointed by the new market as well.