Tesco's Fresh & Easy and San Francisco's Tenderloin Redux: Upcoming Developments Offer First Mover Opportunity For Fresh & Easy or Competitors

Pictured above is the new Curran House affordable family housing and retail development, created by the Tenderloin Neighborhood Development Corp. and the San Francisco Mayor's Office of Housing, in the Tenderloin neighborhood. It's major new developments like this and others that are changing the downtown San Francisco neighborhood. Click here to learn more about this and other similar developments in the Tenderloin.

In our Sunday (July 27) feature, Fresh Buzz: Tesco's Fresh & Easy Neighborhood Market, Tesco PLC and Related Food Retailing News and Insight, we wrote an item about Tesco's Fresh & Easy Neighborhood Market saying "no thanks" to San Francisco, California Mayor Gavin Newsom and Dan Falk, the executive director of the Tenderloin Neighborhood Development Corp., to locating a small-format Fresh & Easy grocery store in a potential mixed-used development in the low-income Tenderloin neighborhood in downtown San Francisco, after Tesco representatives toured the neighborhood.

In that item, "Tesco's Fresh & Easy to San Francisco's Mayor: No thanks in the Tenderloin," we wrote that although the neighborhood currently has its share of less than desirable inhabitants, the majority of its residents are hard working San Franciscans who can't afford to live in other more desirable neighborhoods in the city due to the extremely high rental costs in the city by the bay.

We also discussed how the Tenderloin neighborhood is changing, including how Asian and other ethnic immigrants are turning it around by opening small businesses and raising families in the low-income downtown mixed-residential and commercial neighborhood.

Further, we suggested Tesco take a second look at putting a Fresh & Easy grocery store in the Tenderloin, based on the fact the neighborhood is changing for the positive, along with the fact that it is underserved by grocery stores that offer a selection of basic groceries and fresh foods at reasonable prices. In other words, despite the negative aspects of the Tenderloin, many positive aspects also exist, including market-based ones; not to mention how much commercial retail space rents will go up as the neighborhood starts more rapidly developing.

In our email inbox today we noticed a story from the San Francisco-based blog BeyondChron (a name play on the fact the San Francisco Chronicle is the only major daily newspaper in the city) written by Randy Shaw, who is a longtime activist for San Francisco's Tenderloin neighborhood, the editor of the blog, and the director of the Tenderloin Housing Clinic, which advocates for and develops affordable housing in the San Francisco neighborhood.

In his piece, "State Approves Uptown Tenderloin Historic District," Shaw talks about an application to the California Historical Resources Commission that was made in 1983 to create the national Uptown Tenderloin Historical District.

The application languished for over two decades. But Shaw reports that on July 25, the California state commission approved the application. The proposal now goes to the Keeper of the National Register in Washington D.C. for possible approval.

Such a historic designation if approved by the Keeper of the National Register could be significant for San Francisco's Tenderloin neighborhood and its economic and social development because with such designations comes the opportunity to receive federal grants and loans to restore historic buildings and public spaces. In turn, such urban designations bring in private sector developers who want to locate commercial and residential developments in such districts.

Should the Tenderloin get this historical district designation it likely will mean improvements in the downtown neighborhood will happen much faster than without it, potentially offering its residents a better lifestyle along with creating new commercial developments, including opportunities for retail grocers.

As we said in the item in Sunday's feature, those grocers who get to neighborhoods such as San Francisco's Tenderloin or downtown Los Angeles, stand the best chance of being the most successful food retailers in such respective areas. First mover advantage has its benefits after all.

Perhaps this is a new reason for Tesco's Fresh & Easy, along with other grocery chains like San Francisco Bay Area-based Safeway Stores, Inc. and others, to consider locating a store in that new development at Eddy and Taylor Street in San Francisco's downtown Tenderloin neighborhood? We think it is.

We spoke with a spokesperson in San Francisco Mayor Gavin Newsom's office today who said the mayor's phone line is open and waiting to hear from any and all grocery chains and independents who might want to take a first, or second, look at the Tenderloin site.

Meanwhile, Randy Shaw reports a lease has already been signed to locate a Tenderloin Historic Museum at Eddy and Leavenworth, which is near the proposed development at Eddy and Taylor, where Mayor Newsom and Dan Falk wanted Tesco to locate a Fresh & Easy store.

Shaw says that and other new projects on the drawing board will eventually create lots of new residential and tourist pedestrian traffic in the downtown neighborhood. And, one thing we all know, people have to eat, and prefer to shop in their own neighborhood rather than drive or take public transportation outside of it to shop at a supermarket like many of the Tenderloin's current residents do.

Read Randy Shaw's full piece about the evolving tenderloin neighborhood here. Click here to read about some new developments in the neighborhood. Click here to read about a major new facility the Salvation Army opened last month in the Tenderloin neighborhood. Click here to read about the various Tenderloin neighborhood new housing and economic development initiatives being spearheaded by San Francisco's internationally famous Glide Memorial Church.

We bet with all the changes coming to the Tenderloin neighborhood, that if Tesco's Fresh & Easy doesn't jump on the opportunity soon to locate a store there, an enterprising grocery chain or independent will soon do so.

In fact, we were told today by a very reliable source that in addition to discount salvage grocery chain Grocery Outlet having an interest in the Eddy and Taylor site in the Tenderloin, a major food retailer and a very successful Bay Area multi-store independent grocery chain are both considering looking at the site as well, each sighting the fact that locating stores in low-income "food desert" neighborhoods such as the Tenderloin is becoming a competitive advantage in an increasingly competitive retail grocery industry in California and elsewhere in the U.S.