Grocery Wars

With economic conditions in the Bay Area improving, the grocery wars are once again heating up as several new players compete with the well-established for a share of the estimated $15.8 billion spent at grocery stores in 2010.

Fresh & Easy, an American subsidiary of England-based giant Tesco, entered last year and now has seven stores operating in Concord, Walnut Creek, Danville, Pleasanton, Vacaville, San Jose and Pacifica. Three more are scheduled to open April 27 in San Jose, Hayward and Napa. Hiring is currently underway for a store in San Francisco, where two additional markets are also planned. Other cities targeted for Fresh & Easy stores are Mountain View, Sunnyvale, Vallejo, Fairfield, Antioch and Oakley.

Henry’s Farmers Market and , two companies that were founded by the same family years apart, will soon be opening new stores in Walnut Creek and Dublin, respectively. Henry’s first Bay Area store will be on Geary Road in Walnut Creek, and Sprouts second Bay Area store will be in Amador Plaza in Dublin. The companies recently announced that they would merge.

Berkeley-based has also been in an expansion mode. Last year, it opened new stores in Concord, Dublin, Gilroy and Watsonville, and now has more than two dozen locations in the Bay Area.

Seafood City, a supermarket featuring a wide selection of Filipino and Asian grocery items, has continued its push into the Bay Area from San Diego where it started 20 years ago. now operates in five Bay Area cities including San Jose, Milpitas, Concord, Union City and Vallejo.

Kroger, the nation’s largest grocery chain, announced plans in 2010 to open two stores in Oakland under its Foods Co banner by the end of 2012. One would be in Foothill Square on MacArthur Boulevard and the other at 66th Avenue and San Leandro Street. Both stores would be 72,000 square feet.

In March, Target opened a 135,000-square-foot store on the Oakland/Emeryville border that features an assortment of fresh food, including produce, packaged meat and baked goods. A similar store is scheduled to open Oct. 9 in Dublin. In September 2010, Wal-mart received approval from the City of Antioch, to expand its existing store by 33,575 square feet, most of which will be dedicated to a grocery area. It will become the first Bay Area Wal-Mart to offer groceries.

Meanwhile, Safeway, the Bay Area’s largest grocery seller, has been taking steps to combat the competitive expansion currently underway. It announced plans in January to revamp or open new stores in Pleasanton, Castro Valley, El Cerrito, Campbell, Los Gatos and Burlingame.

In addition, the company is working at getting city approvals for new stores in Emeryville, Pleasant Hill and Berkeley, and is also considering a new store in the Oakland hills on Redwood Road. A store in Oakland’s Montclair district was recently remodeled.

In Campbell, Safeway plans to occupy a former Mervyn’s store on West Hamilton Avenue and turn it into a 55,000-square foot . In Los Gatos, demolition and reconstruction of an existing Safeway store will create a new 42,000-square-foot market. In Burlingame, a similar reconstruction will produce a 52-000-square-foot store.

Safeway is also planning to offer more rewards to its best customers. Safeway Chairman, President and CEO Steven Burd told investment analysts in March that the company planned to roll out chain-wide an online marketing program, “Just for U,” that it has been testing in select markets. The program offers shoppers personalized pricing based on their shopping history; easy-to-access coupons that can be downloaded onto their loyalty cards; plus additional club specials and other enhancements.

Lunardi's Supermarket will move into the San Jose store once occupied by the now-shuttered Cosentino's Market. The opening for the new Lunardi's was scheduled for April 19. This adds to Lunardi’s other locations in Los Gatos, San Jose, Belmont, Burlingame, San Bruno, Danville and Walnut Creek.

And moving in to San Jose from Santa Cruz county, New Leaf Community Markets is taking over a spot in Canyon Creek Plaza that was vacated by PW Markets. New Leaf is know for locally grown organic produce and sustainable seafood. New Leaf has five stores in Santa Cruz County and one in Half Moon Bay in San Mateo.

Bon appétit!