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

Northern California Market Special Report

More than two years after we first reported on it, Sacramento, California-based Good Eats - formerly Good Eats Grocer - is today opening its first combination fresh-prepared foods, specialty grocery market and cafe at 3145 Folsom Boulevard in East Sacramento.

[Read our July 8, 2008 story: Upcoming New Markets Report-Sacramento: Former Raley's CEO Michael Teel and Partners Preparing Launch of New 'Good Eats Grocer' Small-Format Chain.]

Good Eats is a venture founded in 2008 by Michael Teel, the son of the owner of West Sacramento-based Raley's Supermarkets, Joyce Raley-Teel, and the grandson of its founder, the late Tom Raley, and his partner, Michael Ashker.

Teel, who was the CEO of Raley's from 1996 -to- 2002, left the supermarket chain to start up a Sacramento-based magazine publishing and media company, Prosper Media, with Ashker. Later the two started M2 Venture Partners, a venture capital firm where they operated jointly as managing partners. M2 stood for the fact both partners' first names are Michael. Good Eats is one of the companies the firm funded and started. The details are in our July 8 story linked at the top of this piece.

The two are no longer involved together in M2 Venture Partners. Ashker, a veteran investment banker, venture capitalist and entrepreneur, is now president & CEO of Blackfish Financial, chairman of Brushfire Media Group and principal/managing partner at Agility Partners. All are his ventures.

Good Eats has been spun out of the investment firm as a standalone company majority-owned by Michael Teel and his fiancée Julie Rollofson.

Teel was the CEO of Good Eats until January of this year, when he returned to Raley's as CEO following the resignation of Bill Coyne. Julie Rollofson became CEO at that time.

Raley's has been struggling in the competitive Northern California food and grocery retailing market, even though it has the top market share in the Metropolitan Sacramento market and is number three, after Safeway Stores and Save Mart's Lucky chain, in the San Francisco Bay Area.

Teel took over once again as CEO after being gone for eight years, as part of a strategy by the family to "right the (struggling) ship," as he put it after being named head of the family-owned supermarket chain, which has about 159 stores, and does about $3.5 billion in annual sales.

Rollofson helmed today's opening of the East Sacramento store since taking over as CEO Of Good Eats. She's planning a big grand opening in September.

The flagship Good Eats market was supposed to open in December 2009-January 2010 but was postponed in part because Michael Teel became CEO of Raley's in January 2010.

Joyce Raley-Teel, along with her husband Jim Teel, are the co-chairman of Raley's board of directors. Ms. Raley-Teel worked in various executive capacities at Raley's for decades before retiring a few years ago. Her husband, Jim Teel, also spent decades as a Raley's executive. He served as the chain's head of human resources for many years, then spent more years in the top senior executive ranks.

Investment banker, venture capitalist and media man Ashker has founded a number of companies in the Sacramento region, including Imerica Life & Health Company, Healthaxis and Courtlink.

As a venture capitalist he's also been involved in funding numerous companies. For example, he has served as a financial advisor for fast-growing Colorado-based grocery chain Sunflower Farmers Market. In 2007 Ashker structured a $30 million new package for the grocery chain through one of his investment funds.

The East Sacramento flagship Good Eats market is located in what was formerly the Andiamo restaurant, a popular spot for decades in the capital city. Good Eats gutted the building and has done extensive remodeling to turn it into the hybrid small-format fresh-prepared foods store/specialty grocery market/cafe.

The market offers: in-store-made hot and cold fresh-prepared foods of all types for takeout (there's also an eat-in area); fresh meats (and seafood), merchandised in full-service counters; fresh produce and flowers; a bakery; a deli featuring cheeses, lunch meats and related items; a wine shop and wine bar; an espresso bar/cafe; and a selection of shelf-stable specialty, natural and organic grocery items.

The Sacramento Good Eats market opening today actually isn't the company's first store. In early 2009 it opened its first fresh food/specialty grocery/cafe in Scottsdale, Arizona, naming it The Kitchen at Good Eats Grocer, in order to put an emphasis on the prepared foods emphasis of the format. The Sacramento store, like the company's name, is just Good Eats. "The Kitchen" has been dropped, as has"Grocer."

In March of this year Good Eats closed the Arizona unit, which was located in The Shops at Gainey Village center in Scottsdale, after just over a year in operation. Good Eats offered no specific reason for the closing.

In an August 18, 2008 piece - Small-Format Food Retailer 'Good Eats Grocer' Signs Leases For Two More Store Sites; Five More Stores in the Pipeline For the Sacramento Metro Market - we noted that Good Eats had signed leases for two additional locations in the Sacramento region. We also quoted Michael Teel, who said Good Eats had plans for an additional five units in the region. One of the two stores with signed leases was later given up. It's the site of the decades popular Corti Brothers supermarket in Sacramento. The Corti family was in a dispute at the time with the landlord of the building over renewing the lease. The grocer and its landlord came to terms on a new lease. Corti Brothers remains open - and popular. The details are in the August 18 piece.

It's unclear at present if and when Good Eats plans to go forward with opening the additional markets in the Sacramento region. However, since taking over early this year, Julie Rollofson appears to be working towards that goal. As such, we wouldn't be surprised if an announcement of a second unit or more comes before the end of this year.

We also won't be surprised if some synergies between Raley's and Good Eats appear in the not too distant future.

It's not going to be easy for Good Eats to succeed though. But it has a chance if it executes well, focuses on customer service and doesn't offer too high of price points for the fresh-prepared foods and other food and grocery items it's offering.

On August 19, Tesco's Fresh & Easy Neighborhood Market announced the first eight stores it will open in Northern California in 2011. None of the first eight stores are in the Sacramento region. The nearest unit is in Vacaville, which is about 45 miles from Sacramento. Fresh & Easy is shooting for a February 2011 opening for the first batch of stores. [See - August 21, 2010: April 2010 Prediction Correct: February 2011 Target to Open First Eight Fresh & Easy Neighborhood Market Stores in Northern California and August 19, 2010 - Tesco Will Open its First Eight Fresh & Easy Neighborhood Market Stores in Northern California in 'Early 2011.']

There are 18 Fresh & Easy locations in the Sacramento Metro region (one in Sacramento/Vacaville, for a total of 19 confirmed) that Tesco has confirmed to date, and a couple we've discovered in our reporting. See our Northern California Fresh & Easy Store List. Therefore, we expect some of the Sacramento area stores to be opened later in 2011.

Fresh & Easy Neighborhood Market is also in the process of obtaining additional future store locations in the Sacramento region and throughout Northern California.

Fresh-prepared foods are a central focus of the Fresh & Easy format and stores. As such, when the stores start opening in the Sacramento region, the market will get an added dose of competition in the growing ready-to-eat and ready-to-heat fresh foods retailing segment. Stay tuned.

Below are the stories thus far in our '2010 Northern California Market Special Report' series:

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

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

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