Safeway Planning A Whole Foods-Style Store in its Hometown
Safeway Stores, Inc. is planning to built a 65,000 square-foot upscale "Whole Foods style" natural and organic foods supermarket in Pleasanton, California. Safeway's corporate headquarters is located in Pleasanton.
Safeway would build the store on a 35 acre site near their corporate headquarters according to the Pleasanton Weekly News, a weekly community publication. The site is being developed to include several large office buildings.
Safeway isn't discussing the proposed project but the Pleasanton Weekly obtained a copy of the proposed site plan.
The proposed new Safeway would have a major focus on natural and organic products and look much like a new Whole Foods store according to the proposed plans. For Safeway this would be a major step in taking their current focus on natural, organic and specialty foods in their top-tier "Lifestyle" format stores and extending it considerably in a full-blown natural foods retail format.
NSFM expects Safeway to also include a deep selection of specialty, ethnic and gourmet foods in this store if the chain does build it. This would build on Safeway's expertise honed over the last 10 years by the retailer's in-house specialty and natural foods department. This would include specialty and natural/organic foods across all store categories, including perishables and well as produce, meat, seafood, nonfoods, prepared foods and grocery.
Pleasanton would be a good location for such a store for Safeway. Safeway's corporate headquarters is in Pleasanton and the supermarket chain is one of the city's largest employers.
Second, Whole Foods currently doesn't have a store in Pleasanton or the immediate surrounding area. The natural grocer's nearest store is about 25-30 miles away.
Third, Pleasanton is a urban area in that there are 4-5 cities within a few minutes drive from the community. There are about 500,000 people within a 25 minute drive from Pleasanton.
Lastly, Pleasanton and the surrounding area has a high percentage of the population with college degrees and many with graduate and professional degrees. Whole Foods says this is the number one criteria they use in selecting a retail store site/location.
Currently the only retailer (other than an existing Safeway Lifestyle store) doing significant specialty and natural foods merchandising in Pleasanton is an independent, Gene's Fine Foods. The independent does a good job but the store is relatively small and the natural and organic selection limited.
A 65,000 square-foot Safeway, similar in look and merchandising philosophy to a Whole Foods, would likely draw from Pleasanton (about 100,000 population), next door Dublin, and nearby Livermore, San Ramon and Danville, as well as other areas close by.
Safeway has conventional and "Lifestyle" format stores in all of these areas. But a Safeway Natural Foods Supermarket shouldn't hurt these stores as it's likely many shoppers in these communities would still shop their local Safeway primarily but also shop the nearby natural Safeway secondarily. Better that for Safeway than to have these consumers shop at Whole Foods or another natural foods store in the area.
In an article earlier this week titled "Will the Big 3 Supermarket Chains Challenge Whole Foods in its Niche" Natural!Specialty Foods Memo (NSFM) posed the question asked in that title. (you can find the our article in NSFM's Tuesday Talking Points Memo.)
In our Tuesday piece we concluded that one or more of these big 3 chains would. If Safeway goes through with this proposal it could be the beginning of that challenge for one of the Big 3.
NSFM is looking further into Safeway's proposed natural foods store and will bring our readers more as things develop.
More Retailer News, Information & Analysis:
Tesco's Fresh & Easy...NSFM has written much about Tesco's development of it Fresh & Easy Neighborhood Market format which the UK-based retailer is launching in the U.S. The first
stores are slated to open beginning in November, 2007 in California, Arizona and Nevada. Writing in the online publication the Huffington Post, writer Al Norman offers an interesting take on Tesco's new convenience format and compares it to Wal-Mart's new small format developments (which we have written about on NSFM). You can read his story from the August 29, 2007 Huffington Post here: http://www.huffingtonpost.com/al-norman/british-invader-forces-wa_b_62357.html In the story Norman mentions how Tesco carried out a stealth campaign in the U.S. as they developed the Fresh & Easy format.
Coffee king to invade Russia...Starbucks is opening its first Starbuck's Coffee Shop in Russia next month (Sept., 2007). The first Russian Starbucks will be opened in a popular mall near Moscow. The mall already has 5 cafes located in it. You can read more here: http://seattletimes.nwsource.com/html/businesstechnology/2003859960_russia30.html
Starbucks inks Deal with A&P...Starbucks also is increasing its partnerships with supermarket retailers, placing a growing number of Starbucks cafes, coffee bars and kiosks inside stores. The latest retailer to ink a deal with Starbucks is the Great Atlantic & Pacific Tea Co., Inc., otherwise know as A&P. A&P said it will begin placing Starbucks cafes in some of its stores beginning in November with a store located in New Jersey. You can read more here: http://www.reuters.com/article/bondsNews/idUSWNAS318420070830
Starbucks has been growing it's in-store cafe partnerships with retailers at a fairly rapid pace. Supermarket chains like the idea of having the Starbucks brand inside their stores as a drawing card. And Starbucks likes the foot traffic avaliable inside a supermarket location.
All Aboard...
Whole Foods' Market Express Format: A Brief Analysis
On Thursday NSFM reported on Whole Foods Market, Inc.'s decision to turn an existing 18,500 square-foot Wild Oats banner store in Boulder, Colorado into a convenience-type format called "Whole Foods Market Express" as part of the supernatural grocer's post-merger plan.
Whole Foods says the "Express" market will offer a "value-oriented product mix, grab-and-go offerings and will be a practical fit for its neighborhood." The store will be located in the current Baseline Road Wild Oats store in Boulder. The neighborhood includes a high concentration of University of Colorado at Boulder students.
Whole Foods' decision is very interesting in light of Tesco's current roll out of its Fresh & Easy Neighborhood Market format (stores scheduled to open starting in November in California, Arizona and Neveda) and Wal-Mart's development (in the planning stages) of a small footprint upscale convenience-type store.
In the case of Whole Foods and Wal-Mart (relative retailing David's and Goliath's) their paths seem to be crossing more and more these days despite the retailers' significant size and sales differences. Wal-Mart's major natural and organic grocery sales initiative ("organics for less") for its stores has the potential to strike at the heart of some of Whole Foods' bread and butter business. Whether or not intended, Whole Foods is a target of this initiative in terms of taking category market share away from the top natural and organic products retailers.
In turn, no sooner had it been reported (about a week ago) that Wal-Mart is in the planning stages for development of an upscale, convenience-type store, we not only see Whole Foods announcing it will test one but also preparing to open it very soon. This just shows how all retail players and formats are converging when it comes to the natural, organic and specialty foods categories.
In the case of Tesco they are the first mover of the three in terms of this upscale, fresh food-oriented convenience format. (It's important here to note that a C-store chain, Wawa Food Markets based in Pennsylvania, has being operating numerous fairly upscale convenience stores which feature lots of prepared foods and specialty items for well over a decade. There are some significant differences to the Tesco, Wal-Mart and Whole Foods concepts but Wawa has been a leader in this segment on a regional basis in the eastern U.S. for over a decade.)
NSFM has no doubt that UK-based Tesco played a major role in both Wal-Mart and Whole Foods' wanting to test this format. Tesco is the world's third largest retailer and put lots of research and study into the Fresh & Easy format before breaking ground. The chain conducted much of this research in a stealth mode and suprised the industry when their plans came out in the media. Tesco also has put much research in the convenience chain's product mix--and since Tesco is considered one of the world's retail leaders in prepared foods merchandising the "fresh" concept comes naturally to them.
It's too early to tell if a small footprint convenience-oriented format will work in the U.S. on a national basis. Wawa Food Markets has proven it can on a regional basis, although they also retain many traditional C-store merchandising aspects in their stores.
Safeway Stores, Inc. is planning to built a 65,000 square-foot upscale "Whole Foods style" natural and organic foods supermarket in Pleasanton, California. Safeway's corporate headquarters is located in Pleasanton.
Safeway would build the store on a 35 acre site near their corporate headquarters according to the Pleasanton Weekly News, a weekly community publication. The site is being developed to include several large office buildings.
Safeway isn't discussing the proposed project but the Pleasanton Weekly obtained a copy of the proposed site plan.
The proposed new Safeway would have a major focus on natural and organic products and look much like a new Whole Foods store according to the proposed plans. For Safeway this would be a major step in taking their current focus on natural, organic and specialty foods in their top-tier "Lifestyle" format stores and extending it considerably in a full-blown natural foods retail format.
NSFM expects Safeway to also include a deep selection of specialty, ethnic and gourmet foods in this store if the chain does build it. This would build on Safeway's expertise honed over the last 10 years by the retailer's in-house specialty and natural foods department. This would include specialty and natural/organic foods across all store categories, including perishables and well as produce, meat, seafood, nonfoods, prepared foods and grocery.
Pleasanton would be a good location for such a store for Safeway. Safeway's corporate headquarters is in Pleasanton and the supermarket chain is one of the city's largest employers.
Second, Whole Foods currently doesn't have a store in Pleasanton or the immediate surrounding area. The natural grocer's nearest store is about 25-30 miles away.
Third, Pleasanton is a urban area in that there are 4-5 cities within a few minutes drive from the community. There are about 500,000 people within a 25 minute drive from Pleasanton.
Lastly, Pleasanton and the surrounding area has a high percentage of the population with college degrees and many with graduate and professional degrees. Whole Foods says this is the number one criteria they use in selecting a retail store site/location.
Currently the only retailer (other than an existing Safeway Lifestyle store) doing significant specialty and natural foods merchandising in Pleasanton is an independent, Gene's Fine Foods. The independent does a good job but the store is relatively small and the natural and organic selection limited.
A 65,000 square-foot Safeway, similar in look and merchandising philosophy to a Whole Foods, would likely draw from Pleasanton (about 100,000 population), next door Dublin, and nearby Livermore, San Ramon and Danville, as well as other areas close by.
Safeway has conventional and "Lifestyle" format stores in all of these areas. But a Safeway Natural Foods Supermarket shouldn't hurt these stores as it's likely many shoppers in these communities would still shop their local Safeway primarily but also shop the nearby natural Safeway secondarily. Better that for Safeway than to have these consumers shop at Whole Foods or another natural foods store in the area.
In an article earlier this week titled "Will the Big 3 Supermarket Chains Challenge Whole Foods in its Niche" Natural!Specialty Foods Memo (NSFM) posed the question asked in that title. (you can find the our article in NSFM's Tuesday Talking Points Memo.)
In our Tuesday piece we concluded that one or more of these big 3 chains would. If Safeway goes through with this proposal it could be the beginning of that challenge for one of the Big 3.
NSFM is looking further into Safeway's proposed natural foods store and will bring our readers more as things develop.
More Retailer News, Information & Analysis:
Tesco's Fresh & Easy...NSFM has written much about Tesco's development of it Fresh & Easy Neighborhood Market format which the UK-based retailer is launching in the U.S. The first
stores are slated to open beginning in November, 2007 in California, Arizona and Nevada. Writing in the online publication the Huffington Post, writer Al Norman offers an interesting take on Tesco's new convenience format and compares it to Wal-Mart's new small format developments (which we have written about on NSFM). You can read his story from the August 29, 2007 Huffington Post here: http://www.huffingtonpost.com/al-norman/british-invader-forces-wa_b_62357.html In the story Norman mentions how Tesco carried out a stealth campaign in the U.S. as they developed the Fresh & Easy format.
Coffee king to invade Russia...Starbucks is opening its first Starbuck's Coffee Shop in Russia next month (Sept., 2007). The first Russian Starbucks will be opened in a popular mall near Moscow. The mall already has 5 cafes located in it. You can read more here: http://seattletimes.nwsource.com/html/businesstechnology/2003859960_russia30.html
Starbucks inks Deal with A&P...Starbucks also is increasing its partnerships with supermarket retailers, placing a growing number of Starbucks cafes, coffee bars and kiosks inside stores. The latest retailer to ink a deal with Starbucks is the Great Atlantic & Pacific Tea Co., Inc., otherwise know as A&P. A&P said it will begin placing Starbucks cafes in some of its stores beginning in November with a store located in New Jersey. You can read more here: http://www.reuters.com/article/bondsNews/idUSWNAS318420070830
Starbucks has been growing it's in-store cafe partnerships with retailers at a fairly rapid pace. Supermarket chains like the idea of having the Starbucks brand inside their stores as a drawing card. And Starbucks likes the foot traffic avaliable inside a supermarket location.
All Aboard...
Whole Foods' Market Express Format: A Brief Analysis
On Thursday NSFM reported on Whole Foods Market, Inc.'s decision to turn an existing 18,500 square-foot Wild Oats banner store in Boulder, Colorado into a convenience-type format called "Whole Foods Market Express" as part of the supernatural grocer's post-merger plan.
Whole Foods says the "Express" market will offer a "value-oriented product mix, grab-and-go offerings and will be a practical fit for its neighborhood." The store will be located in the current Baseline Road Wild Oats store in Boulder. The neighborhood includes a high concentration of University of Colorado at Boulder students.
Whole Foods' decision is very interesting in light of Tesco's current roll out of its Fresh & Easy Neighborhood Market format (stores scheduled to open starting in November in California, Arizona and Neveda) and Wal-Mart's development (in the planning stages) of a small footprint upscale convenience-type store.
In the case of Whole Foods and Wal-Mart (relative retailing David's and Goliath's) their paths seem to be crossing more and more these days despite the retailers' significant size and sales differences. Wal-Mart's major natural and organic grocery sales initiative ("organics for less") for its stores has the potential to strike at the heart of some of Whole Foods' bread and butter business. Whether or not intended, Whole Foods is a target of this initiative in terms of taking category market share away from the top natural and organic products retailers.
In turn, no sooner had it been reported (about a week ago) that Wal-Mart is in the planning stages for development of an upscale, convenience-type store, we not only see Whole Foods announcing it will test one but also preparing to open it very soon. This just shows how all retail players and formats are converging when it comes to the natural, organic and specialty foods categories.
In the case of Tesco they are the first mover of the three in terms of this upscale, fresh food-oriented convenience format. (It's important here to note that a C-store chain, Wawa Food Markets based in Pennsylvania, has being operating numerous fairly upscale convenience stores which feature lots of prepared foods and specialty items for well over a decade. There are some significant differences to the Tesco, Wal-Mart and Whole Foods concepts but Wawa has been a leader in this segment on a regional basis in the eastern U.S. for over a decade.)
NSFM has no doubt that UK-based Tesco played a major role in both Wal-Mart and Whole Foods' wanting to test this format. Tesco is the world's third largest retailer and put lots of research and study into the Fresh & Easy format before breaking ground. The chain conducted much of this research in a stealth mode and suprised the industry when their plans came out in the media. Tesco also has put much research in the convenience chain's product mix--and since Tesco is considered one of the world's retail leaders in prepared foods merchandising the "fresh" concept comes naturally to them.
It's too early to tell if a small footprint convenience-oriented format will work in the U.S. on a national basis. Wawa Food Markets has proven it can on a regional basis, although they also retain many traditional C-store merchandising aspects in their stores.
It's good though to see Tesco, Wal-Mart and now Whole Foods experimenting with this concept. Many American consumers are looking for alternatives to "big box" shopping and that fact could spell success for the retailer(s) who can come up with the right format and product mix--at the right retails--to draw these shoppers.
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