Mollie Stone's Markets' Year of Passionate Improvement Continues With Launch of New Website Tomorrow; But There's Also More In-Store

Northern California Market Region

Mollie Stone's Markets' uses the slogan "The Best of Both Worlds" to describe its retail format and approach to food and grocery retailing, which is to offer basic necessities - what it calls necessity shopping - along with specialty, natural, organic and gourmet foods - passion shopping - under the same roof.

But the theme or slogan also aptly describes 2011 for the privately-held, nine-store San Francisco Bay Area grocer, in that so far this year Mollie Stone's has been passionately focusing on the necessity of continuous improvement in what today have become the two worlds of food retailing - a grocer's stores and its use of cyberspace and social media to communicate with shoppers.

Mollie Stone's Markets' year of passionate improvement takes another step tomorrow when the Mill Valley (Marin County), California-based food retailer launches its brand new website, which according to co-owner Dave Bennett will not only look good but will also be filled with added features, along with being a work of continuous improvement in and of itself.

The website is at: http://www.molliestones.com/. If the new website isn't working right away on Friday it's probably because it's being tweaked by the designers.

The launching of the new website tomorrow comes on the heels of Mollie Stone's hiring of its first social media manager, which we reported exclusively on in this July 14, 2011 story: Mollie Stone's Markets' Takes Next Step in its Social Media Journey By Hiring First In-House Manager.

As we noted in the story, Mollie Stone's Markets' has been growing its use of social media significantly. As part of that growth the new website will over time integrate the grocer's social media sites with features on the website, according to Elizabeth Milks, the retailer's social media project manager.

Speaking of integration, Mollie Stone's isn't letting its passion for cyberspace and social media take its focus off the nuts and bolts of food retailing - its stores.

In fact the opposite is true. Since January of this year the retailer has been waist-deep in various store remodeling projects as well as acquiring its ninth store in late January in San Francisco's Castro District and opening it less than two months later, on March 9.

Along with opening the new store in San Francisco's Castro District, which is Mollie Stone's third store in the city, the grocer has remodeled the produce, bakery and deli departments in its Burlingame, California supermarket, a project it started in January and completed in April. (You can see a photo here.)

Additionally, Mollie Stone's has just completed the remodeling of the produce department (pictured above) in its Sausalito, California store, along with doing major resets of the in-store bakery and cheese shop.

As part of the produce department remodeling project, the store's manager and the Mollie Stone's team heading it up decided to extend the fresh fruit and vegetable-filled department outside, adding the merchandising feature pictured below in front of the store.

The concept fits the outside of the store well because Sausalito, which is just over the Golden Gate Bridge from San Francisco, is a European-style village community located on the water and its residents are very healthy food and foodie-oriented. The fresh produce outside therefore makes a very locally relevant message, as well as lending itself to impulse purchases and thus added sales for the store, which is exactly what happened last week as the fresh fruits featured in the tropical-themed display below were selling briskly.

Next up for Mollie Stone's Markets, which is co-owned by Mike Stone and Dave Bennett who founded the chain together in 1985, is a remodeling of the deli-prepared foods department in its Greenbrae (Marin County) supermarket. The store's produce department was remodeled in December 2010.

Stone and Bennett have also channeled some of their passion for the grocery business and specialty foods into a new brand of products called "Mike & Dave's." The first product under the eponymous brand, Mike & Dave's Wing Sauce, was launched in May of this year (see our stories linked at the end of this piece). Additional "Mike & Dave's" products are in development, Bennett tells Fresh & Easy Buzz.

Back in cyberspace, Mollie Stone's has launched a new "Secret Sales" promotion on its Facebook site. The promotion works this way: Each Tuesday the grocer posts a deal item along with a promotional code which allows shoppers to get the product at the special Facebook-only price. Customers note the promotional code number and give it to the checker at a Mollie Stone's store in order to get the "secret sale" item at the special price.

The promotion, although brand new has, based on our observation and research, been driving shoppers to the Facebook site and in-turn is driving users of the site into the stores for the deals, depending of course on the specific product and how good the deal is.

Social media project manager Milks' tells us it's the first of what will be many social media site-based promotions Mollie Stone's Markets will be doing in the coming months.

In addition to Facebook, Mollie Stone's has a very active Twitter feed, and also uses the location-based site Foursquare. It also has a YouTube channel where it posts videos.

The launching of the brand new website on Friday will tie-in Mollie Stone's Market's eight month year of passionate improvement - and neither are over yet - in a solid way in our analysis because it will be a bigger and better central place online where the grocer can showcase all it's been doing to improve its stores (and open a new one), along with its growing social media efforts, allowing it to better communicate to shoppers its focus on both the necessities and passions of food and grocery retailing in the San Francisco Bay Area.

Mollie Stone's Year of Passionate Improvement: Follow the Story Below

July 14, 2011: Mollie Stone's Markets' Takes Next Step in its Social Media Journey By Hiring First In-House Manager

June 23, 2011: Mollie Stone's Markets' Owners' Eponymous Mike & Dave's Wing Sauce Grows Display Wings

May 16, 2011: 'Wing Man-to-Wing Man' - Mollie Stone's Markets' 'Mike & Dave' Create, Set to Launch 'Personal Brand' Wing Sauce

March 7, 2011: Fresh & Easy Neighborhood Market, Superior Grocers, Mollie Stone's All Opening New Stores in California Wednesday

March 1, 2011: Mollie Stone's Markets Will Open its New Store in San Francisco's Castro District On March 9

February 17, 2011: Mollie Stones Markets Planning to Open Newest Store in San Francisco First Week in March

January 28, 2011 Mollie Stone's Markets Confirms Our January 13 Report; Announces New San Francisco Store Via Twitter & Facebook

January 13, 2011: Mollie Stone's Markets Taking Over Closed 18th Street Delano's IGA Market in San Francisco's Castro District

November 30, 2010: DeLano's IGA Markets Closing Five Stores in San Francisco & Marin County; Fairfax, Davis Units to Remain Open (For Now)

November 29, 2010: Veteran Grocer Harley DeLano's 'DeLano's IGA Markets' Chain On the Verge of Closure in San Francisco Bay Area

Also see Northern California Special Report for related stories.

Mollie Stone's Markets' Owners' Eponymous Mike & Dave's Wing Sauce Grows Display Wings

Private Brand Showcase

Mike & Dave's Wing Sauce, the eponymous first-in-brand food product created and launched in May by Mike Stone and Dave Bennett, the co-owners of Mill Valley, California-based Mollie Stone's Markets, has sprouted wings of a display kind in one of the grocer's nine stores in the San Francisco Bay Area.

The attractive display (pictured above), in the Mollie Stone's supermarket in San Bruno near San Francisco, is all about summer - A big "wing-style" display of Mike & Dave's Wing Sauce, cross-merchandised with beer and displayed in front of the store's meat department, where the fresh chicken wings are available nearby.

And for many people, summertime and chicken wings go together like, well ... a chicken and its wings.

We wrote about the partner's new brand and first product in this May 16, 2011 story: Wing Man-to-Wing Man' - Mollie Stone's Markets' 'Mike & Dave' Create, Set to Launch 'Personal Brand' Wing Sauce

In addition to offering their wing sauce in the nine Mollie Stone's stores in the San Francisco Bay Area, Stone and Bennett, partners since 1987, are looking for distributors and retailers throughout the U.S. who are interested in taking the product on.

A management member of Unified Grocer's specialty and natural foods distribution division, who also happens to be regular reader of Fresh & Easy Buzz, recently told us the City of Commerce, (Southern) California-based cooperative, which is the largest grocery wholesaler in the Western U.S., is interested in distributing Mike & Dave's Wing Sauce to its chain and independent customers throughout the west.

Unified also has an office in Livermore, in Northern California, along with a distribution center in Stockton, as well as distribution facilities in the Pacific Northwest.

Mollie Stone's Markets is a longtime member of the Unified Grocers cooperative.

Left-to-Right: Partners and wingmen Dave Bennett and Mike Stone.

Strategy Session: Extending the Mike & Dave's brand

Every so often we offer retailers we write about a suggestion or two regarding their private brands - or in the case of Mike & Dave's Wing Sauce what we call a "personal brand." We call this aspect of Private Brand Showcase the "Strategy Session."

Here's our suggestion for the wingmen, Mike Stone and Dave Bennett, as it pertains to their Mike and Dave's Wing Sauce.

One of the hottest fresh-prepared foods items in grocery stores at present is fully-prepared (including the sauce) and cooked ready-to-eat and ready-to-heat chicken wings.

For example, Safeway Stores, which Mollie Stone's Markets competes against in the San Francisco Bay Area, offers a couple varieties of ready-to-eat wings under its Signature Cafe brand. The items are selling extremely well in the grocery chain's stores

Tesco's Fresh & Easy Neighborhood Market also recently introduces a couple varieties of wings to its stores,as we reported on and wrote about in this June 11, 2011 story: Sliders, Meatballs and More - Fresh & Easy Neighborhood Market Introducing Six New Heat & Serve Food Items.

Branding the products also adds value (which for a grocer means a higher gross margin), compared to merely offering the wings as generic prepared foods items. This is particularly true is one has a good hook on which to hang that branding. And we think Mike & Dave do - their "personal brand," Mike & Dave's Wing Sauce.

Our suggestion for the Mollie Stone's wingmen: Create a fully-prepared, ready-to-eat chicken wing item (SKU or two), using the Mike & Dave's Wing Sauce. Brand it as "Mike & Dave's Chicken Wings," using the same graphic design on the label as is on the shelf-stable wing sauce product label, and offer it for sale in the in-stores' deli-prepared foods departments. in the nine Mollie Stone's stores.

Mollie Stone's is well known in the Bay Area for its fresh-prepared foods offerings, so the item is a natural.

The wingmen can also use the ready-to-eat "Mike & Dave's Chicken Wings" product package, merchandised in the store deli departments, to cross-promote the shelf stable Mike & Dave's Wing Sauce, by simply putting a instantly redeemable (IRC) cents-off coupon (say for at least 50-cents) for the bottle of sauce on the outside of the packages. Or tuck a coupon inside to be used later by the customer after they eat the prepare wings. Or do both.

And in good wingman fashion, one hand helping the other, the bottles of Mike & Dave's Wing Sauce can also be used to promote the new ready-to-eat chicken wings under the brand by simply putting a coupon for the product in the deli case on the bottles, a sticker or bottle neck coupon) of the existing wing sauce.

Traditionally it's called cross-promotion or cross-couponing. But in this case we call it "Wingman product marketing." After all, products just like people, can always use a wingman.

Related Stories

Click on this link - Mollie Stone's Markets - for related stories about Mollie Stone's Markets.

Click here - private brands showcase - for past stories in our Private Brand Showcase feature.

'Wing Man-to-Wing Man' - Mollie Stone's Markets' 'Mike & Dave' Create, Set to Launch 'Personal Brand' Wing Sauce

Dave Bennett (left) and Mike Stone, who we've nicknamed the "Wingmen."

Private Brand Showcase

Mill Valley, California-based Mollie Stone's Markets, which is majority-owned by partners Mike Stone and Dave Bennett who founded the local chain in 1985, offers a number of private brands in its nine supermarkets in the San Francisco Bay Area, including a selection of items under its own three brand names - "Mollie Stone's," "Mollie O Organic" and "Nonna Luisa" - which is something that's not all that common for a chain its size to do.

The privately-held, upscale-oriented grocer is a member of the Unified Grocers retailer-owned cooperative and offers its two major private brands - "Western Family" (mainstream food, grocery, perishable, frozen and general merchandise items) and "Natural Selections," the wholesaler's natural and organic products brand - in its nine stores, the newest unit being the store in San Francisco's Castro District, opened on March 9.

Unified, which is the largest retailer-owned wholesale grocer in the Western United States based on annual sales volume ($3.921 billion in 2010), is headquartered in Southern California. It has a Northern California distribution  center in Stockton, in the Northern Central Valley, and a buying-merchandising office in the East Bay Area city of Livermore.

But the focus of this story isn't on the grocer's existing three private brands or the store brands from Unified Grocers it merchandises in its stores.

Instead it's a product branding story of a more personal nature, involving Mollie Stone's Markets' and its owner-partners, Stone and Bennett - Mike and Dave, the "Wingmen."

In fact, if we had a special feature called "Personal Brand Showcase" that's where we'd prefer to put this story. But, and we know our readers will understand, we aren't going to create such a feature because there aren't many stories like this we could put in it.

Stone and Bennett, both veteran grocers in Northern California's San Francisco Bay Area, have created and are preparing to launch in their stores not a new private brand but what we're calling a "personal brand," as a way to distinguish between the two, although there are more similarities between a private brand and "personal brand" (in our usage) than there are differences.

The grocer-partners have created a brand named after their first names and are launching their first item in the nine Mollie Stone's stores this week. The brand name: "Mike & Dave's." The product: "Mike and Dave's Wing Sauce," pictured below.

When we saw the new item (and brand) the name resonated well in our always brand-evaluating minds for a couple reasons.

First, sometimes the best brand names for products come, instead of from long brain-storming sessions and multiple focus group trials, from the simple and familiar - who we are, what we know and the like.

For example, Henry Ford used his last name for his auto company. Familiar. And simple.

The founders of Apple named the company after a common fruit. Simple and familiar enough; though very "out of the apple box" for what was then a revolutionary product - the personal computer.

The football team in Dallas, Texas is, what else - the Cowboys. Could it really be named after anything that's more familiar (and some might say simple) to a Texan than a cowboy?

And two guys in Vermont named Ben & Jerry decided to call their start up company and ice cream brand Ben & Jerry's. The rest, when it comes to the equity and success of the Ben & Jerry's brand today, as they say - is history.

For Stone and Bennett - Mike and Dave - who've been working together in the grocery business for decades, nothing could be more familiar to the partners than each other - and their respective first names.

Imagine, for example, how many times they've used each others first names - face-to-face (or across the way) in the office, over the phone and in e-mails?

The brand name "Mike & Dave's" also fits the product - a wing (as in chicken) sauce - in two key ways: Chicken wings, which absolutely must have plenty of sauce on them, are a personal food, eaten with our hands and usually with family and friends, or strangers who will soon become friends, while watching sports on TV or at parties, picnics and the like.

Secondly, A good business partnership requires the partners to work as a team, something Stone and Bennett are noted for, often acting as each others "wing man" when needed, meaning both understand that in order to stay in business together and maintain and grow a successful grocery chain, neither of them can always be the top banana or spread his wings too much or too often without giving the other a chance to do the same.

Instead, and this is true with the "wing men"-partners, each focuses on his key strengths - and let's the other shine at his. That's what a good "wing man" does in the grocery business.

Dave Bennett's main strengths and key areas of focus are marketing, buying and merchandising - including knowing as much about the kosher foods' category as any grocer in America. Mike Stone focuses primarily on operations, finance and new store development.

As a result of this relationship and partnership "Mike & Dave's Wing Sauce" not only is a "personal brand" in that the name is taken from the two men's first names, it also obtains brand credibility (and offers a fairly decent pun) from what we call the "wing man factor," as described above.

Stone and Bennett - the "Wingmen" - are launching their "Mike & Dave's Wing Sauce" in their nine Mollie Stone' grocery markets, where they will offer it exclusively for now.

But Dave Bennett tells Fresh & Easy Buzz exclusively that he and partner Mike Stone are already "planning [to create and launch] other 'Mike & Dave's' food product items."

Mollie Stone's Markets sells a lot of groceries - particularly specialty food-oriented products - in its nine Bay Area stores. The chain's creative merchandisers love coming up with and implementing cross-merchandising-style displays in the stores.

Therefore, although neither Stone or Bennett - Mike or Dave - or any of their "wing men" on the merchandising team or in the stores have told us this, we're going to spread our predictive wings a bit and offer this: If you happen to be near a Mollie Stone's market (store list here) in the very near future don't be surprised if you see "Mike & Dave's Wing Sauce" not only on the store's shelves but also displayed in one or more locations in the store.

We will offer four potential display opportunities for you to look for if you do happen to visit one of the stores:

>on a thematic end-cap, cross-merchandised with other compatible items;

>in the meat department, displayed near the fresh chicken wings;

>in the deli department;

>and displayed in the produce department, cross-merchandised with ranch dressing, celery, baby carrots and other fresh veggies regularly served with dipping sauces and eaten with sauce-coated chicken wings.

After all, once the store managers and department heads at the nine Mollie Stone's stores learn about the new wing sauce created by and named after their bosses, being the creative merchandisers they are, they're going to want to feature Mike and Dave's "personal brand" in places in the stores where the product is sure to get noticed - and purchased - by customers because ... that's what good wing men and women do in the grocery business.

Related Stories

March 7, 2011: Fresh & Easy Neighborhood Market, Superior Grocers, Mollie Stone's All Opening New Stores in California Wednesday

March 1, 2011: Mollie Stone's Markets Will Open its New Store in San Francisco's Castro District On March 9

February 17, 2011: Mollie Stone's Markets Planning to Open Newest Store in San Francisco First Week in March

January 13, 2011: Mollie Stone's Markets Taking Over Closed 18th Street Delano's IGA Market in San Francisco's Castro District

January 28, 2011: Mollie Stone's Markets Confirms Our January 13 Report; Announces New San Francisco Store Via Twitter & Facebook

November 30, 2010: DeLano's IGA Markets Closing Five Stores in San Francisco & Marin County; Fairfax, Davis Units to Remain Open (For Now)

November 29, 2010: Veteran Grocer Harley DeLano's 'DeLano IGA Markets' Chain On the Verge of Closure in San Francisco Bay Area

'Walmart To Go' - Walmart Stores' Launches Test of Grocery Home Delivery Service Today in San Jose, California

The Insider - Heard on the Street

As the once popular song asked - "Do you know the way to San Jose?"

For mega-retailer Walmart Stores, Inc., which wants to sell more groceries than it's currently doing in the San Francisco/San Jose Bay Area region, and today launched an online-based grocery home delivery service in San Jose, California, the answer is - hopefully.

In my April 7, 2011 column - A Walmart Grocery Home Delivery Service in San Jose, California Wouldn't Likely Be Much to Write Home About - I wrote about Walmart's probable plan to test an online ordering-based fresh food and grocery home delivery service in San Jose, California. The story was first reported by Bloomberg News (here).

Walmart launched that grocery home delivery service test - which it's named "Walmart To Go" - today in San Jose, beginning with a website section attached to its Walmart.com site, where shoppers in the neighborhoods where the Arkansas-based retailer is conducting what it has announced is a "limited test," can order a selection of fresh food and grocery items and have the products delivered to their homes.

You can view the website, Walmart.com/togo, here. Click here for details on the website about "Walmart To Go."

Walmart is offering a limited assortment of fresh food and grocery items on its grocery home delivery site (which is in beta test mode at present) across the basic grocery store categories, ranging from fresh produce, meat, seafood and other perishables; to packaged food and groceries, health and beauty/body care, pet food and supplies, baby food; and household supplies like paper goods, cleaning products and relate non-foods items.

There's also a section on the site for promotional items (Rollbacks), offered at temporarily reduced prices.

Shoppers can also have their drug prescriptions filled using "Walmart To Go," and have the medications delivered to their homes, along with their groceries.

Walmart is currently charging $5 and up for home delivery. According to the website, the current minimum purchase amount required to get a grocery order delivered is $49.00.

As part of the launch, "Walmart To Go" is offering an E-Voucher that shoppers can use to get their first order delivered free of charge.

In order to find out if "Walmart To Go" delivers to their neighborhood, potential online shoppers in San Jose need to put their zip code into a section on the website. If the service is available in their neighborhood, it will let the user know.

I typed in a few different zip codes for various parts of San Jose. The site indicated "Walmart To Go" delivered to about 40% of the zip codes I  punched in. But I didn't do a random sample. Nor did I try all of the available zip codes for the city.

The prices on the assortment of items currently offered on "Walmart To Go" are about in line with what Walmart charges at its hand full of stores in the San Jose area.

The everyday retail price-points for most items, particularly basics like milk and eggs and popular items like 12-packs of Coke, range from being slightly lower to about the same, and in a few cases I noticed higher, than those everyday prices the two leading supermarket chains in the market region - Safeway Stores, Inc. and Save Mart-owned Lucky Supermarkets - charge for like and similar items in their respective stores.

For example, "Walmart to Go" is selling a dozen of its private brand large-size eggs for $1.68, which is about the same as at the two chains mentioned above do for their best-priced private label versions.

Other grocers and discount format stores in the area sell similar quality eggs for less than $1.68, while other grocers retail the item for more than $1.68.

Eggs, particularly large-size, are also regularly advertised by grocer's in the region, just as is the case in other parts of the country.

As an example, Save Mart has its Sunnyside Farms private brand large eggs on sale this week at its Save Mart and Lucky banner supermarkets at buy-one-get-on-free (BOGO). At that promotional price, the cost per-dozen comes out lower than $1.68. But it is a promotional rather than an everyday price.

Walmart's private label fluid milk is selling for $2.41 on the "Walmart To Go" site. That's considerably lower, for example, than what Safeway is currently retailing its Dairy Glen (the lowest-priced of its private label fluid milk brands) fluid milk for. As of today, Safeway is selling a gallon of the Dairy Glen milk for $2.89, and to get that price shoppers are required to purchase a minimum of two gallons.

Other retailers in the San Jose area sell similar gallons of milk for less than $2.89. However, at $2.41, the "Walmart To Go" price-point is among the lowest I've seen when doing price checks in the area.

Lastly, Coca Cola, in the popular 12-pack cans size (Classic, Diet, ect.), sells for $4.38 on the "Walmart to Go" site. That price is about the same as what the two chains and many other grocery stores in the region offer the popular soft drink variety for on an everyday price basis.

Like eggs, 12-packs of Coke are an item promoted and advertised regularly by grocers and other format retail stores. In fact, it's hard not to find one or more retailers in any given market in the U.S. that aren't advertising 12-packs of Coke at least two, and often three, weeks out of a month, particularly in spring and summer.

For example, Raley's Supermarkets, which operates stores under the Raley's and Nob Hill Foods banners in and around the San Jose region, is currently promoting the Coke SKU in its weekly advertising circular for $2.25, based on a minimum customer purchase of four 12-packs.

Eggs, fluid milk and Coca-Cola are among the ten top-selling products or items in U.S. grocery stores.

Safeway Stores is the market share leader in the San Francisco Bay Area, followed by Save Mart and Raley's.

Safeway Store's operates the only major online ordering-based grocery home delivery service in the San Francisco Bay Area. Safeway's delivery area includes San Jose.

Therefore, at least in the parts of San Jose where Walmart is delivering groceries to residences, Safeway will have a new competitor - "Walmart To Go" - although at present the assortment of products Walmart has available to online shoppers on the website doesn't come close to matching the assortment Safeway offers on Safeway.com. But Walmart can add items to its selection easily, which I suspect it will. It's just launched the service as a "limited test," after all.

A few things about "Walmart To Go ... before I go.

First, I like the name. It's short. It's descriptive. And it fits well with Walmart's emerging multi-channel (brick-and-mortar and online), multi- (brick-and-mortar) format food and grocery retailing strategy.

Under the new strategy, there's the supercenters -  the big guys, and the lead horse of the brick-and-mortar store pack.

Next is "Walmart Market", the name Walmart is changing all of its Neighborhood Market supermarkets to, as well as what it will call its new grocery markets in the about 30,000-60,000 square-foot range.

Lastly, there's the smaller guy, "Walmart Express," the name of its new convenience format grocery stores, which will be about 15,000 square-feet.

I think "Walmart To Go," as a name, fits nicely in that mix.

[There's also "Walmart on Campus," the retailer's tiny (about 3,000 square-foot) convenience store on the University of Arkansas campus. But it's really a one-store test for now. So I don't include it yet in the overall multi-channel/multi-format strategy.]

In terms of my lack of enthusiasm for a Walmart home grocery delivery service in San Jose - and it's limited to that region, by the way, as I look at each market region as unique and see some strong potential for such a service by Walmart in other parts of the country - as expressed in my April 7, column, it's still my analysis that from a sales standpoint, at least in the near-to-medium term, a Walmart grocery home delivery service in San Jose, and in most if not all parts of the Bay Area, isn't going to be much to write home about.

However, I like that Walmart is testing it.

And they are testing it in a smart way - just like they did with the "marketside by Walmart" small-format stores in metro Phoenix, Arizona (although I would have tested the stores in the San Francisco Bay Area and in urban parts of Southern California, for example, as I've said before) - which is to start with a very limited test, in this case the city of San Jose, and then see what happens. The investment is low, particularly for Walmart, and as such if the retailer decides not to go forward and expand the service, the loss will be moderate.

I also think in a longer-term sense a grocery home delivery service operated in certain parts of the U.S. could fit well within what is a growing and emerging online business at Walmart Stores.

Walmart's ASDA chain in the United Kingdom has a grocery home delivery service, so the concept isn't completely new to the chain. In fact, Walmart has transferred one or more executives from the UK operation to work on "Walmart To Go." The U.S. and the UK, where online-based grocery home delivery is much more popular, are very different animals though when it comes to the business.

The retailer is planning some interesting new developments online, including experimenting with using social media to help it improve the performance of its online shopping offering in a much more aggressive way than it is currently doing. If things go according to its plans, Walmart Stores will become a much more dominant online retailing force in the U.S. over the next couple years than it is at present.

On April 18, Walmart announced it has signed a definitive agreement to acquire Mountain View, California-based social media company Kosmix, which "has developed a social media technology platform that filters and organizes content in social networks to connect people with real-time information that matters to them," according to its two founders, Venky Harinarayan and Anand Rajaraman.

The two founders, whose first company, Junglee, was acquired by Amazon.com in 1998, have been involved in the social media space for a number of years, focusing on ways to better integrate social media with online shopping.

Harinarayan and Rajaramen, along with members of the team they assembled at Kosmix, are going to work for Walmart and will be part of a newly formed research and development operation the retailer has created in Silicon Valley, called @WalmartLabs.

Walmart says "it plans to expand the @WalmartLabs team and expects the new group will create technologies and businesses around social and mobile commerce that will support Walmart’s global multi-channel strategy, which integrates the shopping experience between bricks and mortar stores and e-commerce."

The @WalmartLabs operation is part of the retailer's Walmart.com division, which is based in Brisbane, a small city next door to San Francisco.

Mountain View, where Kosmix was based, is a 30-45 minute drive from Brisbane and less than 10 miles from San Jose. San Jose is under an hour's drive from the Walmart.com offices in Brisbane, depending on traffic conditions, of course.

I included the travelogue paragraph above in order to highlight the geographical - and human resource - synergies behind Walmart's launching the grocery home delivery service in San Jose, acquiring the Mountain View-based social media-based company, and setting up @WalmartLabs in Silicon Valley, which San Jose and Mountain View are part of.

From the human resource and talent angle, The San Jose -to- San Francisco geographical region is home to, among other top-flight social media companies (and start ups), Facebook (Palo Alto) and Twitter (San Francisco). It also has the human resource talent and infrastructure Walmart needs to become a leader in online shopping and in using social media to help it achieve that objective.

Walmart should be given credit for making the synergistic  moves. (I just don't think, in my experience and analysis, "Walmart To Go" will be very popular in San Jose from a sales perspective. But I could be dead wrong)

In addition to creating an e-commerce/social media research and development center, @WalmartLabs, putting the operation in Silicon Valley gives the retailer an added presence, along with having its Walmart.com facility there, in the Bay Area, where it plans to do all it can to become a serious player in food and grocery retailing over the next few years. And testing "Walmart To Go' in nearby San Jose does allow for the operation to be nearby both Walmart.com and the new @WalmartLabs start up.

According to my sources, the retailer is also looking at possibly testing "Walmart To Go" in at least one other part of the country, and perhaps even two regions. But for the immediate-term, my sources tell me, the focus will be on the limited test in San Jose, where Walmart wants to "find a way" to sell more groceries, and hopes one of those ways is through "Walmart To Go."

I will have more to say about "Walmart To Go" in a upcoming column, including hopefully some evaluations by one or two people who've tried the online ordering and home delivery service. Stay tuned.

- The Insider

Read 'The Insider's' past columns here.

A Walmart Grocery Home Delivery Service in San Jose, California Wouldn't Likely Be Much to Write Home About

Walmart's ASDA chain delivers fresh food and groceries to online shoppers' homes in parts of the United Kingdom.

The Insider - Heard on the Street

An April 1 non-April Fool's Day report by Bloomberg (here) that Walmart Stores, Inc. might be planning to test an online-ordering and grocery home delivery service in the San Jose area in Northern California's San Francisco Bay Area has been getting a considerable amount of attention in the press over the last week.

However, as most often is the case, the numerous publications that have picked up on Bloomberg's piece have merely either re-printed the story partially, fully, or added a couple comments from a favorite industry analyst or two to what Bloomberg had already reported.

Here at Fresh & Easy Buzz we like to offer a bit more depth, particularly when it comes to a story first reported on by another publication. Therefore, I'm going to offer a little analysis, observation and commentary on what Walmart is up to in the San Jose, California region with its potential e-commerce/ grocery delivery scheme.

First, a little history: The idea of launching an online-ordering and home delivery business for fresh foods and groceries isn't brand new at Walmart Stores, Inc. A little over three years ago then corporate head of business development, David Wild, who's team was responsible for the retailer's initial small-format food and grocery store development efforts - the result of which are the four 'marketside by Walmart' stores in suburban Phoenix, Arizona that opened in August 2008 - was also very interested in Walmart's starting up an online ordering and home grocery delivery service.

The new business development team's initial target test market for the online/home delivery scheme was the San Francisco Bay Area. Wild, who left the company later in 2008 to become the CEO of United Kingdom auto parts and bicycle retailer Halfords, worked out of Walmart's Brisbane, California Walmart.com offices. Brisbane is an industrial and residential suburb of San Francisco, located about 50 miles from San Jose.

The online ordering and grocery delivery service was one of a number of new business ideas and concepts Wild and his team came up with that didn't become reality.

For example, another concept the team proposed was a brick-and-mortar health and wellness-oriented small-format store of about 10,000 square-feet that would be part drug store and part natural foods market, the overall focus being on selling products with a health and wellness orientation. Walmart has incorporated some aspects of the format into its new Walmart Express convenience format, the first three stores of which are set to open in a few months in Arkansas.

As part of the e-commerce/home delivery food discussions with the business development team in 2008, Walmart began slotting packaged food and grocery items on its Walmart.com website in early 2009, and has continued to add categories and items to the website since then. The items are ordered online, just like everything else on Walmart.com, and shipped to customers' homes via a postal carrier like Federal Express or UPS, just like Amazon.com does. No perishable foods are offered, however, just shelf-stable products.

Over the last few years, Walmart has off and on looked at testing the online ordering and grocery home delivery service, both in the San Francisco Bay Area and in a couple other regions of the U.S. The retailer's main interest in possibly trying such a service in the Bay Area is because Walmart has few stores in the region that offer fresh foods and groceries. It also continues to struggle in gaining approval from various Bay Area cities in its attempts to convert existing discount format stores into hybrid supercenters that offer fresh foods and groceries, along with attempts to build new supercenters, even smaller units in the 100,000-140,000 square-foot range. The average U.S. supercenter is about 180,000 square-feet.

As a result, the idea of launching a test of an online ordering and grocery home delivery service in the Bay Area has become more interesting to Walmart's senior brass. In essence, the long-term strategy the retailer is looking at in the Bay Area, where it hopes to open numerous smaller-format Walmart Market (30,000-60,000 square-foot food and grocery markets) and Walmart Express (15,000-30,000 square foot convenience-style grocery stores), is to combine however many supercenters it can get approved with the smaller-format stores mentioned above, and then add a grocery delivery service, starting in the San Jose region, where Walmart has enough supercenters so the stores can be used as order-fulfillment centers for the online orders.

Potential: The question that must be asked by and of Walmart though is: Does going into the online ordering and grocery home delivery business in the Bay Area, particularly at this stage of its meager brick-and-mortar store development and presence in the market region, make sense for the retailer? My answer: History and the current state of the online/home delivery business in the region suggests the answer to that question is...no.

For example, from the mid-1990's -to 2001 there were three retailers offering online ordering and home delivery of fresh food and groceries in the nine county San Francisco Bay Area, which today has a population of close to seven million people.

The three retailers were: Safeway Stores, Inc., which is headquartered in the East Bay Area city of Pleasanton; Albertsons; and Webvan, which was a pure-play online/home delivery grocery retailer that went bankrupt in 2011, after only a few years in business. Albertsons, then owned by Albertsons Inc. of Boise, Idaho, closed down its online ordering and home grocery delivery service a couple years later. Today, Safeway Stores, Inc. is the only major food retailer offering the service throughout the nine-county Bay Area. (What was the Albertsons' Northern California division is now owned by Modesto, California-based Save Mart Supermarkets. The stores operated under the Lucky banner.)

The fact Safeway today remains the only major fresh food and grocery online/home delivery grocer in the Bay Area, which research still shows is one of the better markets for the business in the U.S., is probably one of the motivating forces behind Walmart's consideration of launching such a service in the San Jose region.

Safeway fulfills customers' online grocery orders out of some of its supermarkets in the San Francisco Bay Area, where it has about 200 stores. Walmart would do the same, using a couple supercenters it operates in the San Jose metropolitan area.

But despite being the lone e-commerce/home delivery grocer in the Bay Area - and Safeway does a pretty good job at it - it remains a meager business for the grocer. Safeway CEO Steve Burd has recently said as much.

In fact, in an attempt to boost its online/home delivery business, last year Safeway held a very aggressive promotion over a number of months, offering first time users of Safeway.com, its e-commerce-home delivery site, $15 off any orders of $50 or more, along with free delivery. Safeway continued the aggressive promotion until mid-January of this year. Since then it's eliminated the $15-off deal but continues to offer free delivery to first-time users of the service. [You can read a December 15, 2010 story about the promotion in Fresh & Easy Buzz here: Safeway Wants to Grow its Online-Home Delivery Grocery Business - And is 'Giving Away the Store' to Prove it.]

Early this year Burd said in a conference call to analysts the promotion last year added some new business to Safeway.com but that basically it wasn't anything to write home about.

Keeping and continuing to promote the service makes good sense for Safeway though, in my analysis, because it fits well as an integrated and synergistic part of its overall food and grocery business in the Bay Area and in the handful of other U.S. regions where it offers home delivery. But, I can share this with you: Safeway's senior executives don't currently see Safeway.com as being one of the chain's major growth engines at present, even in its Bay Area home market.

Mega-Walmart can afford to experiment with and test an online ordering and grocery home delivery service in the San Jose region. After all, the start-up costs aren't huge - buying a few combination freezer/refrigerator/dry product delivery trucks, outfitting a few store backrooms to fulfill the online orders and spending some cash for marketing and advertising. But the benefits would likely also be meager, in my analysis.

Therefore, before it goes forward with the test - and our sources say Walmart hasn't decided if it will do so yet - the Bentonville, Arkansas-based mega-retailer should keep in mind that the majority of the customers of Safeway's online ordering and home grocery delivery service are dual-income (and higher income), well-educated younger professionals. These are the consumers in the Bay Area who primarily shop at Whole Foods Market, Safeway's more upscale stores and numerous other more upscale grocery markets in the Bay Area. They use Safeway.com primarily for convenience. Price isn't a motivating factor, particularly considering delivery charges add on $10 or more to a grocery order.

Will this demographic shop for their groceries at Walmart, even with home delivery? My analysis: I doubt it. Why: Walmart isn't their brand.Whole Foods is. Target is. Even Costco is. But not Walmart.

If I'm correct that means Walmart would need to reach a different shopper demographic (than Safeway does) with its online ordering and home delivery grocery service, like it does with its stores -  its traditional lower-income/middle income segment.

The problem with this segment when it comes to an online/home grocery delivery business for Walmart is consumers in these segments are looking to save money on grocery purchases not spend more, which unless Walmart delivers the orders for free or for a couple dollars, will be the case. Additionally, lower-to-middle income shoppers use online ordering/ home grocery delivery services in very low percentages, both in the Bay Area and nationally in the U.S., according to numerous studies.

Walmart might be tempted to think that because many lower-to-middle- income consumers use its Walmart.com service to buy products online and have the items shipped to their homes via a postal carrier, that these same shoppers will therefore use a home grocery delivery service in equal or similar numbers.

But the comparison is apples and oranges, so to speak. Why? Shopping for fresh food and groceries is a regular task and a very competitive enterprise. Most lower-to-middle income consumers shop at multiple stores, shop weekly ads, use coupons and look for the best deals. In contrast, ordering products, be it contact lenses, books, a television set or clothing, from Walmart.com for home shipment, which can actually be cheaper because there's often no sales tax on the items, is an irregular task that can be done after first comparing prices at brick-and-mortar stores.

Walmart's best strategy for the San Francisco Bay Area region is a smaller-format brick-and-mortar store approach, supplemented with as many supercenters of the smaller variety as it can gain approval for over the next few years.

What the retailer needs to do for starters is strike up a deal with the mayors and city councils' of the region's three biggest cities - San Jose, San Francisco and Oakland, like its done with Mayor Daley in Chicago, offering to focus on building and opening mostly smaller-format stores in exchange for getting approval for a few bigger supercenters. With municipal budgets in California so stretched, these cities are willing to listen, something they probably wouldn't have done five years ago when the region was booming and city budgets were flush with money.

Once Walmart has achieved a bit of critical mass in the San Francisco/San Jose Bay Area (eg: food and grocery sales market share) it's my analysis that perhaps then an online ordering and home grocery delivery service might make sense for the retailer. But until then, if Walmart tries it now, I don't think it will be anything to write home about.

- The Insider

Read 'The Insider's' past columns here



Mollie Stone's Markets Will Open its New Store in San Francisco's Castro District On March 9

Northern California Market Region

Mollie Stone's Markets will open its new store at 4201 18th Street in San Francisco's Castro District a week from tomorrow, on Wednesday, March 9.

The privately-held Mill Valley-based (Marin County) grocer plans to make a formal announcement later today or tomorrow.

The Castro District store in San Francisco will be Mollie Stone's ninth supermarket, and its third store in the city.

On February 17, 2011 we reported that the privately-owned independent food retailer planned to open the Castro District store this week. See: Mollie Stone's Markets Planning to Open Newest Store in San Francisco First Week in March. One of our sources for the information was a senior-level employee of Mollie Stone's.

Mollie Stone's Markets, however, has decided to set March 9 as the grand opening date for its newest store at 4201 18th Street in San Francisco, which up until recently (see the stories linked below) was a DeLano's IGA Markets store, Fresh & Easy Buzz has learned.

Related Stories

February 17, 2011: Mollie Stone's Markets Planning to Open Newest Store in San Francisco First Week in March

January 13, 2011: Mollie Stone's Markets Taking Over Closed 18th Street Delano's IGA Market in San Francisco's Castro District

January 28, 2011: Mollie Stone's Markets Confirms Our January 13 Report; Announces New San Francisco Store Via Twitter & Facebook

November 30, 2010: DeLano's IGA Markets Closing Five Stores in San Francisco & Marin County; Fairfax, Davis Units to Remain Open (For Now)

November 29, 2010: Veteran Grocer Harley DeLano's 'DeLano IGA Markets' Chain On the Verge of Closure in San Francisco Bay Area

January 26, 2011: Fresh & Easy Neighborhood Market is On A Mission - In San Francisco's Mission District

Plus: see (click on) the following links for additional, related stories: Fresh and Easy Northern California, Fresh and Easy San Francisco Bay Area, Northern California, Northern California Special Report, SF Bay Area.

Mollie Stone's Markets Taking Over Closed 18th Street Delano's IGA Market in San Francisco's Castro District

Above: A display in the produce department at the Mollie Stone's store in Greenbrae, California. The photograph was taken in December 2010, shortly after the store's produce department was remodeled. Notice the cross-merchandising of the gourmet cheeses and Carr's Table Water Crackers, plus the free cheese samples, in front of the apple display. Such suggestive selling-oriented cross merchandising is both creative, visually pleasing and smart. For example, it ups the odds an apple-buying customer will buy cheese and crackers, along with whatever else she buys during her shopping trip, astronomically. In addition, If she buys just one of the packages of the random weight gourmet cheese and a box of the crackers in the display, it could add anywhere from a minimum of about $5 -to- as much as $10 to her total market basket purchase at the store. And when it comes to average market basket, the more dollars the better for grocers. [Photo courtesy of: David Bennett/Mollie Stone's Markets.]

Northern California Market Region - San Francisco Bay Area

In two stories published in late November 2010 about San Francisco Bay Area-based independent grocer Delano's IGA Markets and the forced closure of five of its seven grocery stores, we reported that another local multi-store independent grocer, Mollie Stone's Markets, was interested in taking over the Delano's IGA Market store at 4201 18th Street, in San Francisco's Castro District.

[Read the two stories - November 29, 2010: Veteran Grocer Harley DeLano's 'DeLano IGA Markets' Chain On the Verge of Closure in San Francisco Bay Area and November 30, 2010: DeLano's IGA Markets Closing Five Stores in San Francisco & Marin County; Fairfax, Davis Units to Remain Open (For Now).]

We can now report that Mill Valley-based (Marin County) Mollie Stone's Markets will be taking over the former Delano's IGA Market store, which is about 9,000 square-feet, on 18th Street, in San Francisco's Castro District.

Mollie Stone's plans to do some remodeling inside the Castro District store and have it open by March or April of this year, a senior employee at the eight-store privately-held chain told Fresh & Easy Buzz.

The 4201 18th Street San Francisco market will be Mollie Stone's ninth grocery store overall, and its third unit in San Francisco. (Click here to view the locations of the eight Mollie Stone's stores.) The eight Mollie Stone's stores are a mix of smaller, urban food and grocery markets, the San Francisco stores, and medium-sized supermarkets, the other five units, which are located in Marin County, on the San Francisco Peninsula, and in Palo Alto.

Mollie Stone's Markets is an upscale grocer, putting an emphasis on specialty, ethnic, kosher, natural and organic food and grocery items, along with fresh-prepared foods, quality meats, produce and baked goods.

But the grocer also merchandises a full selection of everyday food and grocery items in its stores, including a selection of its own "Mollie Stone's" private brand, along with the Western Family brand, which is distributed by its wholesaler, Unified Grocers.

In fact, Mollie Stone's, which was founded by Mike Stone and David Bennett in 1985, plays up this dual specialty-mainstream merchandising philosophy by calling its stores, "The Best of Both Worlds," which is also Mollie Stone's marketing positioning and advertising tag line. Partners and majority-owners Stone and Bennett, who celebrated Mollie Stone's Markets' 25th birthday last year, still head-up the chain.

Mollie Stone's Markets' also puts an emphasis on customer service. For example, most of the grocer's stores have full-service, butcher shop-style meat and seafood counters, as well as self-service counters.

Additionally, the stores have service-delis, which feature an extensive offering of ready-to-eat and ready-to-heat fresh-prepared foods, plus lunch meats, cheeses and other deli items.

Most of the eight Mollie stone's stores also have in-store bakeries.

One unique feature the grocer has in two of its stores - the San Bruno and San Mateo markets - is "Mollieland," a professionally-supervised in-store child care and play area, where mom can leave the kids while she does her grocery shopping.

The Castro District location should a prime one for Mollie Stone's, as the neighborhood's demographics score very high for specialty/natural/organic, along with gourmet and prepared foods.

As we suggested in our November 30, 2010 piece linked at the top, the Castro District location would have been a good one for Tesco's Fresh & Easy (it's even better for Mollie Stone's though because it knows how to neighborhood merchandise in San Francisco), especially if it merchandised the store in a non-cookie cutter fashion, and while offering its basic selection of products, skewed the product mix high in the specialty, gourmet, natural-organic and fresh-prepared foods categories.

But the store in the prime Castro District location on 18th Street isn't in the cards for Fresh & Easy Neighborhood Market - or any other grocer. Instead, as we said in our November stories would likely be the case, it will soon be a Mollie Stone's Markets food and grocery store.

Mollie Stone's knows of what Fresh & Easy Buzz writes when we say the 18th Street location in the Castro District has huge potential, despite its mere 9,000 square-feet.

Mollie Stone's has a store of about the same size or even smaller, at 2435 California Street at Fillmore, in San Francisco's Pacific Heights neighborhood. The store, which for decades prior to becoming a Mollie Stone's a number of years ago, was the locally-famed Grand Central Market, owned and operated by Mike Stone's father-in-law.

The small-box store, then and now, has among the highest sales per-square-foot of any supermarket in the Bay Area. As Grand Central Market in the mid-1990's, for example, it was doing over $300,000 in weekly sales, according to a former major vendor who serves as a correspondent for Fresh & Easy Buzz in the Bay Area. We're told the now Mollie Stone's Grand Central Market does more than that amount weekly. The store's small parking lot is so busy during prime shopping hours, Mollie Stone's has one or two people directing in-and-out auto traffic in the lot for much of the day.

Mike Stone and David Bennett kept the Pacific Heights store's history alive when they took it over by naming it "Mollie Stone's Grand Central Market," rather than changing the name to "Mollie Stone's Markets," which all of their other stores are called.

Delano's IGA Markets closed and vacated the Castro District store on 18th Street in December 2010. The building's landlord is Kroger Co.'s Ralphs Supermarkets division, which for many years operated a Cala/Bell Market grocery store in the building.

In 2006, Kroger's Ralphs' division, which is based in Southern California, sold eight of its Cala Foods and Bell Market banner small supermarkets in San Francisco and Marin County to Harley Delano and his son Dennis. The eight stores formed the basis of the DeLano's IGA Markets' chain. Harley Delano was the president of Ralphs' Cala Foods/Bell Market division from 1990-1999.

The Delano's later closed two of the eight stores, bringing the total store count down to six.

In 2010 they opened up a store in Davis, California, Westlake IGA Market, which brought the total number of stores they owned and operated back up to seven. Davis is near Sacramento. Now there are just two markets owned by the Delano's.

The Davis store and a store in the Marin County city of Fairfax, Fairfax IGA Market, remain open because unlike the six that were closed late last year because of financial problems, the two stores are owned by the father and son team under a separate ownership structure. Also, unlike the six closed stores the Delano name isn't used on the Davis and Fairfax stores.

Don't be surprised if Mollie Stone's Markets grabs at least one of the remaining four former Delano IGA Markets stores, all of which have now been closed.

[Related Story - January 12, 2011: First Northern California Fresh & Easy Neighborhood Market Stores Opening March 2; Nine More to Follow March-April.]

[Also - Read a selection of recent and past Fresh & Easy Buzz stories about the Northern California market region, including the San Francisco Bay Area, at theese green links: Northern California, Northern California Special Report and Fresh and Easy Northern California.]

DeLano's IGA Markets Closing Five Stores in San Francisco & Marin County; Fairfax, Davis Units to Remain Open (For Now)

The DeLano's IGA Market unit at 207 Flamingo Road in Mill Valley, California (pictured above) is one of the independent grocer's five (out of seven total) stores closing by December 17, 2010 [Photo Credit: Jay Masunaga.]

Northern California Market Region Special Report
Breaking Buzz - Plus Analysis

Early yesterday we reported on the problems California food and grocery industry retailing veteran Harley DeLano is having with his DeLano's IGA Markets chain, which he co-owns with his son Dennis. The DeLano's operate seven stores in Northern California using the IGA banner - three units in San Francisco, three in nearby Marin County and one market in Davis, California, which opened in September 2009 and is the independent grocer's newest store. Davis, which is near Sacramento and home to the University of California at Davis, is a 73-mile drive from San Francisco.

You can read the story below on the blog or at the link here - November 29, 2010: Veteran Grocer Harley DeLano's 'DeLano IGA Markets' Chain On the Verge of Closure in San Francisco Bay Area.

We've now learned additional information about the impending store closures thanks to information made public by Joseph Neri, the attorney for Delano Retail Partners LLC, which is the corporate entity for the DeLano's and their privately-held grocery chain, and other sources.

According to Neri, Delano Retail Partners LLC is closing five of its six stores in the San Francisco Bay Area. He says the stores will be closed by December 17.

The one Bay Area store that will remain open (at least for now) is in Fairfax, in Marin County. The store in Davis, California will also remain open, according to our sources.

We noted in yesterday's story - November 29, 2010: Veteran Grocer Harley DeLano's 'DeLano IGA Markets' Chain On the Verge of Closure in San Francisco Bay Area - that the Fairfax and Davis stores, which the DeLano's operate in a somewhat seperate way as Hometown IGA Markets, including using a different website for the two stores than the one used for their six DeLano's IGA Markets, would likely remain open even if the other six stores are closed. That will be the case for now at least, based on our reporting.

Here are the details, according to attorney Neri, along with further information we've obtained from other sources:

DeLano Retail Partners LLC subleases the five stores to be closed in San Francisco and Marin County from Ralphs Grocery Co. of Ohio, which is an entity set up by Kroger Co., which owns Southern California-based Ralphs Supermarkets.

Ralphs Grocery Co. has evicted the grocer from the five stores. Last week Ralphs filed lawsuits in San Francisco and Marin County Superior Courts against DeLano Retail Partners LLC for failure to pay rent on the five units, according to Neri. The amount Ralphs is asking the courts to order DeLano Retail Partners LLC to pay in back rent is well over $1 million, according to court records.

DeLano Retail Partners doesn't have the cash to pay the back rent, or for that matter to keep current going forward. Therefore Harley DeLano and his son Dennis decided to close the five stores.

According to Neri, DeLano Retail Partners LLC plans to turn over the five stores to Ralphs Grocery Co. of Ohio by December 17, a little over two weeks from today. As we reported yesterday, product in the stores is being sold out. The grocer is discounting remaining products in all of the five stores to be closed.

Ralphs Grocery Co. isn't the landlord for the DeLano's Hometown IGA Markets entity, which includes Fairfax IGA, in Marin County's Fairfax, and Westlake IGA Market, in Davis. No eviction notices have been filed for the two stores as of today.

Below are the addresses of the five stores being shuttered:

>Outer Richmond District, San Francisco: 6333 Geary Boulevard (at 27th Avenue)
>Castro District, San Francisco: 4201 18th Street
>Mission District, San Francisco: 1245 South Van Ness Avenue
>Marin County, Tiburon: Cove Shopping Center, 1 Blackfield Drive
>Marin County, Mill Valley/Tamalpais Valley, 207 Flamingo Road

In yesterday's story we mentioned that Marin County-based multi-store independent grocer Mollie Stone's Market's is interested in one or more of the five closing DeLano IGA Markets stores.

First, because the DeLano's are closing the five stores by December 17 due to eviction and related financial difficulties, Mollie Stone's won't be acquiring any of the markets directly from the grocer. However, according to our information, Mollie Stones is interested in at least two or three of the sites, which once vacant will be back on the market, since Ralphs' has no plans to locate stores at the locations.

Kroger Co.-owned Ralphs Grocery Co., which is based in Southern California, has sold or closed all of its Ralphs banner supermarkets and Cala Foods/Bell Markets banner stores in Northern California, accept for one remaining Cala Foods unit in San Francisco's Nob Hill neighborhood, which is slated to close either at the end of this year or sometime in 2011. Instead it operates the Foods Co discount warehouse chain in Northern California and the Bay Area region, which is the format Kroger/Ralphs is focusing on in the market. [See - July 22, 2010: 'The Insider' - After Four Years in the High Weeds in Northern & Central California, Kroger Co. is Emerging to Grow its Foods Co Chain.]

A (potential) Fresh & Easy opportunity

One of the stores that Tesco's Fresh & Easy Neighborhood Market plans to open early next year in Northern California is not far from the Outer Richmond District Delano's IGA Market unit, at 6333 Geary Boulevard, that will soon be closed. The Fresh & Easy store, which is at 32nd Avenue & Clement Street in the Outer Richmond, should benefit from the closing of the DeLano's market because there isn't another grocery store in the immediate portion of the neighborhood.

Tesco's Fresh & Easy would be wise to take a serious look at all five of the closing DeLano's IGA Markets stores, particularly the two units in Marin County (Mill Valley and Tiburon), where Fresh & Easy Neighborhood Market doesn't currently have any planned locations.

The 18th Street store in San Francisco's Castro District, which is a space of no more than 10,000 square-feet, is also a location Tesco's Fresh & Easy should look very closely at trying to acquire. We suspect a number of grocers will be looking at the location.

The Castro District ranks high for sales of natural, organic, fresh-prepared and specialty foods, for example. Both Whole Foods Market and Trader Joe's have plans to open stores in the Castro in 2011. Whole Foods' approval looks solid. Trader Joe's is having some problems in terms of getting its store site in the neighborhood approved.

The other two closing DeLano's stores, the Geary Boulevard unit in San Francisco's Outer Richmond District mentioned previously and the Mission District store on South Van Ness, offer less potential for Fresh & Easy in our analysis, although we would take a close look at both, just not as close as the others.

The Geary Boulevard DeLano's IGA Market location in San Francisco's Outer Richmond District is likely too close in proximity to the 32nd Avenue & Clement Street Fresh & Easy store opening early next year for both stores to do well, in our analysis. One store would probably cannibalize sales of the other, which is something that's been happening with some of the Fresh & Easy stores that are located too close to each other in Southern California, Arizona and Nevada.

The Mission District Delano's store offers some potential for Tesco's Fresh & Easy. However, based on a number of factors, it's our analysis the location would be a real uphill struggle for the Fresh & Easy format.

The Series: Northern California Market Region Special Report

November 29, 2010: Veteran Grocer Harley DeLano's 'DeLano IGA Markets' Chain On the Verge of Closure in San Francisco Bay Area

November 22, 2010: Tesco's Fresh & Easy Neighborhood Market Plans Five New Stores in Northern California's Sacramento Region

November 8, 2010 - Fresh & Easy Neighborhood Market's '5800 Third Street' Northern California 'Flagship' Store in San Francisco is Taking Shape

November 5, 2010: Fresh & Easy Neighborhood Market Queuing Up Three Additional Stores in Northern California For Early-to-Mid 2011 Openings

November 3, 2010: Tesco's Fresh & Easy Neighborhood Market Plans New Store in Northern Central Valley, California City of Ceres

November 1, 2010: Tesco's Fresh & Easy Neighborhood Market Planning to Build its First Store in Northern California City of Brentwood

October 30, 2010: Raley's Launches New 'Raley's TO GO' Pre-Packaged, Refrigerated Fresh-Prepared Foods Line

October 27, 2010: Save Mart CEO Bob Piccinini Poised to Make it to the 'Bigs' as Member of Golden State Warriors' Ownership Group

September 26, 2010: While Tesco's Fresh & Easy Neighborhood Market Postponed, Target Opened 42 'P-Fresh' Fresh Food and Grocery Markets in Northern California

September 22, 2010: Sunflower Makes Three: Sunflower Farmers Market's First Northern California Store Will Be in Roseville

September 22, 2010: Tesco's Fresh & Easy Neighborhood Market Planning A New, Third Store in San Jose, California

September 22, 2010: Fresh & Easy Neighborhood Market Plans to Open Two Additional Stores in Northern California in Early 2011

September 21, 2010: A Look Inside Whole Foods Market's Newest Store, A Mall Location in Santa Rosa, California

September 20, 2010: About Today's Walmart Stores, Inc. Smaller Stores Media Frenzy: We Scooped it On July 6, 2010

September 19, 2010: Whole Foods Market Gives Itself A 30th Birthday Present: 299th Store Opens This Week in Santa Rosa, California

September 18, 2010: Keep On Truckin' - Whole Foods Market Celebrates 30 Years This Weekend

September 14, 2010: Eight Plus One: Napa Unit Added to Eight Fresh & Easy Neighborhood Market Stores Opening in Northern CA in Early 2011

September 5, 2010: BevMo Chain Ends Full Time Employment For Store Workers; They Say No Way and Join With UFCW Union to Demand 'A Better BevMo'

September 3, 2010: How the California Grocers Association and its Members Can Snatch Victory From the Jaws of the Defeat of California's Plastic Bag Ban

August 25, 2010: Going Rural: New Fresh & Easy Neighborhood Market Store Planned for Sutter Creek in Northern California

August 23, 2010: Hybrid 'Good Eats' Market-Cafe From Raley's CEO Michael Teel & Company Opens Today in Sacramento CA

August 22, 2010: The Insider: Challenges & Opportunities: Tesco's Fresh & Easy Neighborhood Market Will Supply its Northern CA Stores From its Riverside County DC in Southern CA

August 21, 2010: April 2010 Prediction Correct: February 2011 Target to Open First Eight Fresh & Easy Neighborhood Market Stores in Northern California

August 19, 2010: Tesco Will Open its First Eight Fresh & Easy Neighborhood Market Stores in Northern California in 'Early 2011.'

August 17, 2010: Henry's Farmers Market 'Beats' Fresh & Easy Neighborhood Market to Northern California Despite Multi-Year Head Start; Elk Grove Store Opens Tomorrow

July 29, 2010: Tesco's Fresh & Easy Neighborhood Market Putting Together List of Managers Interested in Transferring to Northern California

July 25, 2010: Safeway to Start Construction on New Pleasanton, California Flagship Store Soon; Thanksgiving 2011 Target Opening

July 22, 2010: 'The Insider' - After Four Years in the High Weeds in Northern & Central California, Kroger Co. is Emerging to Grow its Foods Co Chain

July 21, 2010: Vacant Fresh & Easy Neighborhood Market Store in Pacifica, California Has the City's Mayor in a Pickle

July 18, 2010: 'The Insider' - When it Comes to Northern California - its Competitors are Rome Burning and Tesco's Fresh & Easy Neighborhood Market is Nero Playing the Fiddle

July 14, 2010: Tony Bennett Has Nothing on Whole Foods Market When it Comes to Loving San Francisco...That City By the Bay

July 6, 2010: Walmart Looking for Store Sites in Northern California For 20,000 Sq-Ft Neighborhood Market by Walmart Prototype Store

June 28, 2010: Smart & Final to Open its New Format SmartCo Foods Stores in California and Arizona

June 26, 2010: Tesco Planning to Announce in July When First Northern California Fresh & Easy Neighborhood Market Stores to Open

June 14, 2010: Newly-Named Whole Foods Market CO-CEO Walter Robb Comes Full Circle With the Opening of the New Store in Mill Valley CA

June 5, 2010: Sprouts Farmers Market Opens First Northern California Store in Sunnyvale; Strikes Up Partnership With Local Non-Profit Farm

May 29, 2010: Going Rural: Fresh & Easy Neighborhood Market to Build First Store in Los Banos, California

May 28, 2010: First Phase of Fresh & Easy Neighborhood Market-Anchored Condo Development in San Francisco's Bayview Set For Completion in June

May 9, 2010: A Whopping 15 of Whole Foods Market's 41 New Stores in Development are in California - And Nine of The 15 Are In Northern CA

May 8, 2010: Sprouts, and Likely Henry's to Beat Fresh & Easy to Northern California Despite it's Big Head Start

May 6, 2010: Going Smaller & Getting 'Hybrid': Walmart's Smaller Supercenter in Vacant Retail Buildings Strategy Began in 2008

April 19, 2010: Tesco Debating Whether to Launch Fresh & Easy Into Northern California This Fiscal Year... or Wait

[Also: click here , here and here for a selection of past stories on Fresh & Easy and Northern Calfornia.]