Fresh & Easy Buzz: Tony Bennett Has Nothing on Whole Foods Market When it Comes to Loving San Francisco...That City By the Bay

The 2001 Market mixed-use project features a 30,000 square-foot Whole Foods market store as its ground-floor retail anchor, with 82 residential condominium units above.

Northern California Market Special Report

Singer Tony Bennett, who's signature song is "I Left My Heart in San Francisco," has nothing on Whole Foods Market when it comes to loving that cool, grey 'City by the Bay.'

In this May 9, 2010 story - 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 - we reported that 15 of Whole Foods Market, Inc.'s current 41 new stores in development in the U.S. are in Northern California, with all but one of those 15 units being in the nine-county San Francisco Bay Area, home to about 7 million residents. Since we published the story, one of the 15 stores in development - the Mill Valley unit on Blithedale (the second Whole Foods' store in the city) has opened. [See our June 14, 2010 feature story: Newly-Named Whole Foods Market CO-CEO Walter Robb Comes Full Circle With the Opening of the New Store in Mill Valley CA.]

One of the 15 Northern California stores (14 are in the Bay Area) in development included in our May 9 piece is a future Whole Foods Market unit in San Francisco's Castro District. Since we ran the story, we've learned considerable details about the store's location. And the future store will be a good one for Whole Foods, based on those details, and our knowledge of the market and neighborhood.

The future Whole Foods Market store, which will be at 2001 Market Street (at the corner of Dolores Street) in San Francisco, is part of a major sustainable and neighborhood-oriented mixed-use (residential-commercial) development called 2001 Market. The project is a partnership between The Prado Group real estate development company, Whole Foods Market, architect's William McDonough + Partners and BAR Architects, and Lanscape design firm April Phillips Design Works.

The artist's rendering above depicts the neighborhood-friendly design of the planned 2001 Market Street ground-floor anchor Whole Foods Market store.

The 2001 Market development is proposed as an urban mixed-use project which offers high-quality housing located above a planned 30,000 square-foot neighborhood-oriented Whole Foods Market store. The Whole Foods' unit is being designed to be neighborhood and pedestrian friendly, including having features like bicycle parking, so shoppers in the neighborhood, which has lots of foot traffic, can bike back-and-forth to the store.

The neighborhood is actually more commonly referred to as Upper Market rather than the Castro District, which is next door. But the two areas overlap, so are often referred to synonomously.

Here's how the developer and design team describes the development's mission:

"The goal of the 2001 Market project is to bring people, housing, community-serving retail, and social vitality to this prominent corner site. With sustainability as a core value."

[Read what the developer and design team have laid out as the vision for the 2001 Market project here]

The development, which as currently planned has 82 residential condominiums above the 30,000 square-foot ground floor Whole Foods Market store, would replace what is the currently vacant S&C Ford auto dealership. The auto dealership has been vacant for some time, and the City of San Francisco is anxious to see the site developed. The grocer is the retail anchor for the development.

Developer The Prado Group says it expects to present the plans for 2001 Market to the San Francisco Planning Commission in September 2010. If approved, the developer and design team plan to start construction in mid-2011, with a target date for the Whole Foods' store opening in early-2012, followed by the 82 residential units coming on line in mid-2012.

[You can learn additional details about the project, including viewing a number of artist renderings of the proposed development and ground floor Whole Foods market store, at the developer's 2001 Market website.]

Whole Foods Market currently has four locations in San Francisco, in the following neighborhoods:

>Franklin, at 1765 California Street

>Potrero Hill, at 450 Rhode Island Street

>South of Market, at 399 4th Street

>Noe Valley, at 3950 24th Street

The stores range in size from 44,000/45,000 square-feet (Potrero Hill), to about 14,000 square-feet (Noe Valley).

The Noe Valley store is the newest Whole Foods Market unit in San Francisco, having opened in late 2009. The 14,000 square-foot store is already doing nearly $600,000 in weekly sales, according to our sources.

The Noe Valley neighborhood is highly dense. It's also home to many professionals who have among the highest average-income levels in the city.

The store, which previously was home to a Kroger-owned Bell Market, which was part of the Cala/Bell chain that Kroger folded up in the Bay Area, selling some stores and closing others, is the only substantial grocery store in the highly-populated neighborhood, which also has perfect Whole Foods Market demographics: a high-percentage of college educated residents, thousands of foodies and organic food devotees, and an abundance of young professionals.

Whole Foods Market plans to open a fifth store in the City by the Bay, either at the end of 2010 or in early 2011. That unit will be in the Haight-Ashbury neighborhood, located in a building that previously was home to a Kroger-owned Cala Foods store. The 2001 Market store will make five Whole Foods units in San Francisco.

The Austin, Texas-based natural and organic foods grocery chain is also looking for additional store locations in San Francisco, as it is throughout the Bay Area and in Northern California, beyond the 15 stores in the region it currently has in development.

Meanwhile, Tesco's Fresh & Easy Neighborhood Market - which has three planned future store locations in San Francisco (two confirmed and one we've reported exists but is unconfirmed by the retailer) - 18 (confirmed) in the Bay Area, and 37 (confirmed) in Northern California as a whole, has yet to say when it plans to start opening some of its stores in the region. Based on our recent reporting, the grocer could announce its plans for Northern California by the end of this month. [June 26, 2010: Tesco Planning to Announce in July When First Northern California Fresh & Easy Neighborhood Market Stores to Open]

It's been well over two years since Tesco announced its planned 37 Fresh & Easy store locations in Northern California. The grocer originally planned to start opening some of the stores in late-2008/early-2009 but has continued to postpone the launch.

Meanwhile, in the two-plus years since Tesco's Fresh & Easy Neighborhood Market announced its plans - and 37 stores - in Northern California, much change - and growth by competitors - has occured in the market region.

Here's a snapshot:

>Modesto, California-based Save Mart Supermarkets completed its acquisition of the nearly 200 Albertsons supermarkets it purchased from Cerebus-owned Albertson's LLC, rebranding all the stores to the Lucky banner, as well as remodeling a number of the stores. The majority of the Lucky stores are in the San Francisco Bay Area and Metropolitan Sacramento regions - the two areas where the 37 future Fresh & Easy stores are located. Save Mart is now the number two market share leader in both of these markets. It's second to Safeway Stores, Inc. in the Bay Area and number two after market share leader Raley's in the Sacramento region.

>Bay Area-based Safeway Stores, Inc. has expanded and remodeled numerous supermarkets in Northern California - and has many more remodels in the works. The grocery chain also opened its first small-format (actually "smaller-format," since at 21,000-24,000 square-feet its considerably larger than the first unit, in Long Beach, California, which is about 15,000 square-feet) "The Market" store in San Jose, California (summer 2009). Safeway also has a handful of new stores proposed for Northern California, including a new flagship supermarket in the east Bay Area city of Pleasanton, where its corporate headquarters is located.

>Walmart Stores, Inc. has converted some of its discount format stores in Northern California into hybrid supercenters, which offer a complete selection of fresh food and groceries. More conversions are planned by Walmart, if it can get approvals by local governments. The retailer also has numerous new supercenters planned throughout Northern California, particularly in the Central Valley, in cities like Stockton, Ceres, Patterson, Livingston, Atwater and others.

Additionally, as we've previously reported, Walmart is in the market for vacant big box store buildings, ranging in size from about 75,000 -to- 100,000 square-feet, in the Bay Area. The retailer plans to turn these buildings into smaller-than traditional-size supercenters like the one it opened in the Central Valley city of Modesto in 2008. [See - May 6, 2010: Going Smaller & Getting 'Hybrid': Walmart's Smaller Supercenter in Vacant Retail Buildings Strategy Began in 2008 plus the links at the bottom of the post.]

Further, as we reported in this July 6, 2010 story - Walmart Looking for Store Sites in Northern California For 20,000 Sq-Ft Neighborhood Market by Walmart Prototype Store - Walmart is also searching for store sites in Northern California for it's 20,000 square-foot food and grocery focused prototype store.

>Southern California-based Trader Joe's has opened a number of new stores in Northern California in the last two-plus years, primarily in the Bay Area. Those new stores include its first unit in Berkeley, across the Bay Bridge from San Francisco, which opened a couple weeks ago. Trader Joe's has a number of new stores in development in Northern California, including a fourth unit in San Francisco's Castro district, not far from the planned Whole Foods at 2001 Market Street.

>Arizona-based Sprouts Farmers Market, which competes with Fresh & Easy in Arizona and Southern California, opened its first Northern California store in June in the south Bay Area city of Sunnyvale. More units are planned for the Bay Area and elsewhere in Northern California. [See - June 5, 2010: Sprouts Farmers Market Opens First Northern California Store in Sunnyvale; Strikes Up Partnership With Local Non-Profit Farm]

>Smart & Final-owned Henry's Farmers Market, which is a competitor of Fresh & Easy Neighborhood Market in Southern California, is set to open its first store in Northern California in late August 2010. That store will be located in Elk Grove, near Sacramento. Two of the 19 confirmed Sacramento-area Fresh & Easy stores are planned for Elk Grove. Like Sprouts Farmers Market, Henry's plans additional units in Northern California. [See - May 8, 2010: Sprouts, and Likely Henry's to Beat Fresh & Easy to Northern California Despite it's Big Head Start]

>Additional retailers, including Costco and Target, plus other smaller chains and independents, are growing their respective food and grocery retailing presence and store-counts in Northern California. For example, Costco is opening a few new stores in the region, along with adding additional food and grocery SKUs to its stores. Target is adding its P Fresh fresh food and grocery sections in some of its discount format stores in Northern California, as well as adding expanded grocery sections and SKUs in other units.

>Lastly, we've detailed Whole Foods Market's focus on Northern California, particularly the San Francisco Bay Area.

Speaking of Whole Foods - we think it's safe to say the grocer (and based on our snapshot above, numerous other grocers) is bullish on Northern California, and the Bay Area in particular. It's also fairly clear Whole Foods Market, like Tony Bennett, loves San Francisco - that cool, grey City by the Bay.

The Fresh & Easy Buzz 2010 Northern California Market Special Report Series:

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

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

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