Here Comes Goliath

The new Whole Foods at Haight & Stanyan

San Franciscans are an interesting bunch. Although we generally seem to rail against large chain stores, like the fight against American Apparel on Valencia St, or the recent Happy Meal Ban, we tend to change our tune when the chain in question is one we like or want. Residents of The Castro, for example, are eagerly awaiting the opening of a new Trader Joe’s in the old Tower Records location on Market St, and everyone seems equally thrilled about the new Target on its way to The Metreon (as well as one planned for the old Mervyn’s space at Geary & Masonic), apparently already forgiving and/or forgetting the uproar over their contributions to an anti-gay politician.

Then there’s Whole Foods, which has been on a San Francisco expansion spree lately. In addition to their existing SOMA & Pacific Heights stores, they’ve recently opened locations in Noe Valley & Potrero Hill, with another about to open at Haight & Stanyan, and yet another recently approved for construction at Market & Dolores in the old S&C Ford space across from Safeway. All these stores have gone forward with very little, if any, neighborhood opposition (aside from some minor traffic concerns).

Construction finishing up at the new Haight & Stanyan Whole Foods

Now it may be true that, as far as chains go, companies like Trader Joe’s & Whole Foods are very low on the scale of corporate evil (they’re no Home Depot or Wal-Mart [although Whole Foods is just as anti-union]). They generally pay their employees fairly well (including benefits), have aesthetically pleasing stores with small footprints (physically & environmentally), and sell quality products San Franciscans actually want to buy. However they’re still chains, which means they have an impact on the unique character of our neighborhoods and can negatively affect established locally-owned businesses, sometimes driving them out.

Indeed, Whole Foods’ rapid growth in the ’80s & ’90s was largely fueled by their acquisition of other natural foods grocers & chains, most recently their merger with Wild Oats Markets in 2007, at the time one of their only remaining major competitors. Although initially held up by the FTC due to an antitrust complaint, the deal was eventually given the go ahead. However the FTC investigation appears to continue, even resulting in Whole Foods subpoenaing the confidential financial records of New Seasons Market, a local competitor in Portland, OR, in 2008.

So, given their history, what effect might their new Upper Haight location (slated to open February 16th) have on the established natural food grocers in our community?

I spoke with employees at the two local grocers that will be most directly affected by the opening of the new Whole Foods to get their reaction to the impending competition.

Haight Street Market, Haight & Ashbury

Haight Street Market, opened over 30 years ago, is still a locally-owned, family run business. I spoke with a manager, who wished to remain anonymous. He didn’t have much to say, as he didn’t want to ruffle anyone’s feathers, but he did mention that they’ll be expanding their store in the “very near future”, as previously reported. And on a positive note, he said he’s glad that at least they’re cleaning up that corner, which has been an eyesore since Cala Foods closed in May 2006.

The Real Food Company, Stanyan & Carl

The Real Food Company started in 1969 with its first store at Stanyan & Carl, right off the N-Judah line (where it remains today). They added a second location on 24th St in Noe Valley in 1970, a third on Polk in 1975, and a fourth on Fillmore in 1997. The stores were owned by Kimball and Jane Allen of Marin from 1970-2002, at which point they were sold to Fresh Organics, a subsidiary of Utah-based supplement company Nutraceutical, which also owns Thom’s Natural Foods in The Richmond District. The Noe Valley location was unexpectedly shut down in 2003.

I spoke with Sara, a manager at the Stanyan Street store, to get her reaction to the new Whole Foods. “At first, I was a little surprised they wanted to open here, since they already have so many stores in the city.” She’s not too worried, though. “Although it may impact us a little at first, the majority of our customers are regulars, so I think they’ll keep coming back.” She also pointed out her store’s commitment to organic produce, something Whole Foods likes to preach, but doesn’t whole-heartily practice. Indeed, on a recent visit to The Real Food Co, I could only find two conventionally grown items in the entire produce section.

Unlike Haight Street Market, The Real Food Company doesn’t have any plans to expand their store. According to Sara, it’ll just be business as usual.

Alpha Market, Cole & Parnassus

I wrote Whole Foods to get their perspective on how their new store might impact the established community markets. Adam Smith, Whole Foods Executive Design & Construction Coordinator responded:

“A trend we observe when we move into an area is that rather than take business away from competitors, Whole Foods Market helps to raise the interest in and awareness of natural and organic foods at farmer’s markets, co-ops, and other natural and organic supermarkets. We raise the overall awareness of organic and natural foods.”

This may be true in a community that doesn’t already have a lot of exposure to natural/organic foods, like Redding or Fresno, but I’m not sure such an argument holds up in a place as eco-conscious as San Francisco.

I also asked him about their percentage of organic & locally sourced produce:

“Organic and local percentages vary drastically by season but we expect the Haight Street store to mirror what we see in the surrounding SF stores, 58-60% organic and 50-52% local based on annual purchases”

And what percentage of the staff will be hired locally:

“We hired 168 team members, 97 were transfers from other stores; 56 of which were from other city stores and 71 new team members hired from all over the city.”

Ashbury Market, Frederick & Ashbury

The new Upper Haight store doesn’t necessarily mean impending doom for the local players, though. Just across the Bay, Berkeley Bowl supermarket is thriving, despite their long-standing competition from Whole Foods. They’ve even opened a second location in West Berkeley that’s already very popular.

And further South, in my hometown of Santa Cruz, where Whole Foods only recently opened their first two stores in the County, the established local & natural food grocers seem to be doing pretty well. Shopper’s Corner, across the street from the new Santa Cruz Whole Foods, has made several improvements to their store. And Staff of Life, a fixture in the community for over 40 years, is in the process of completely renovating a former car dealership nearby which they’ll be moving into next month. New Leaf Community Markets, a small natural food chain in the area, built a huge new store a few blocks from their long-standing Westside location which they moved into just before Whole Foods came to town. They also remodeled their Downtown store and built a large new store in Half Moon Bay.

With the surge in demand for local/sustainable food, the market is there. So as long as enough people keep patronizing our neighborhood grocers, they can succeed, even thrive, creating a hulking David to take on the coming Goliath.

7 Comments

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7 responses to “Here Comes Goliath

  1. Ciaran

    Wow—I didn’t realise it was that close to opening. Shows how often I go to that corner.

    My prediction is that it won’t have too much impact on Haight Street Market etc as they draw most of their customs from a very local area and people who have ‘buy a little more often’ shopping pattern who won’t want to spend an hour in Whole Foods and pay their ridiculous prices. I think it is going to pull in a lot of traffic from slightly further afield though, like Sunset/Richmond. Adronicos and Luckys might suffer a lot from this.

  2. Great report. Thank you for all the background information and interviews you did Brendon, to get a good picture of Whole Foods impact. Refreshing to see such even-handed and thoughtful reporting.

  3. dmadey

    WF seems about out of place on Haight as the McDonald’s across the street does.

  4. Firehouse Matthew

    This was an excellent piece.. I for one, will continue to shop at Real Foods for my day to day purchases… The “Whole Paycheck” reputation has me wondering if it will supplant my monthly trip to Safeway in the Castro, but I think this is a good step for this specific corner.. hopefully it will push out the pot pushers who have encamped across the street on haight…

  5. Trev

    Just wanted to say there is no Safeway in the Castro. The Castro is the area around Castro Street south of Market and north of Noe Valley. It was called Eureka Valley before the gays moved in and started calling it the Castro. Neighborhoods do not grow by annexing adjacent neighborhoods, so Upper Market is still Upper Market, and that includes the Safeway location on Market.

  6. Pingback: Streetsblog San Francisco » Will New Trader Joe’s in Nob Hill Bring More Car Traffic?

  7. Pingback: Streetsblog San Francisco » Will New Trader Joe’s in Nob Hill Bring More Car Traffic? - Vehicles Spot

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