Retail Watchers

Safeway has scrapped plans for a new store located at 625 Monterey Blvd. in San Francisco. Interesting development as the plan for a new store was approved by the City.
http://www.socketsite.com/archives/2018 ... apped.html

Without reading too much into it, is there a practical reason why they backed out? Finances? Neighborhood resistance to keep the store open? Mayor Lee's death?

pseudo3d wrote: ↑January 5th, 2018, 11:07 am Without reading too much into it, is there a practical reason why they backed out? Finances? Neighborhood resistance to keep the store open? Mayor Lee's death?

An Alberstons real estate manager was quoted as saying:

“Although the existing store was not being demolished [under previous plans], the extensive construction would have resulted in the grocery store being closed for 10-14 months. Safeway was fortunate to have an amazing group of immediate neighbors and interested community members who helped with design questions and support the entitlement effort. Safeway was close to obtaining building permits this past Fall, at which time a review of building costs and retail developments caused Safeway to pause on an expansion into the parking lot at this time.

“Safeway has been and continues to be a proud member of the Sunnyside neighborhood. … Although an expansion of the grocery store is not feasible at this time, Safeway is still committed to renovating and upgrading the existing store. I would anticipate this design going through the building permit process and getting underway later in 2018. The store should be able to remain in operation through most if not all of the construction.”

Here is the full article.

Clearly they are trying to minimize disruption, minimize lost revenue, and minimize costs by doing this.

The end result is an undersized store remains undersized. The token remodel is taking place which is pretty industry standard when you cancel more major plans (like what Kroger has done where they cancel development of an approved Marketplace store).

The old Safeway had a good understanding of projects that took many, many years to plan and get approval for. It is a good thing they were patient, or they'd be sitting on a bunch of old undersized, out of date stores all over the bay area and Lake Tahoe. At this point, given the new company's financials, they probably need to focus on projects that happen a little faster and start to get them ROI faster.

rwsandiego wrote: ↑January 5th, 2018, 6:36 pm

pseudo3d wrote: ↑January 5th, 2018, 11:07 am Without reading too much into it, is there a practical reason why they backed out? Finances? Neighborhood resistance to keep the store open? Mayor Lee's death?

An Alberstons real estate manager was quoted as saying:

“Although the existing store was not being demolished [under previous plans], the extensive construction would have resulted in the grocery store being closed for 10-14 months. Safeway was fortunate to have an amazing group of immediate neighbors and interested community members who helped with design questions and support the entitlement effort. Safeway was close to obtaining building permits this past Fall, at which time a review of building costs and retail developments caused Safeway to pause on an expansion into the parking lot at this time.

“Safeway has been and continues to be a proud member of the Sunnyside neighborhood. … Although an expansion of the grocery store is not feasible at this time, Safeway is still committed to renovating and upgrading the existing store. I would anticipate this design going through the building permit process and getting underway later in 2018. The store should be able to remain in operation through most if not all of the construction.”

Here is the full article.

The fact that they would slam the brakes on a store retail re-development for reasons of costs is troubling. The company's financials are still an ongoing problem (the Casa Ley CVR payments are due in less than a month). One and a half years ago they sold two Vons DCs and have been leasing those, and I wonder when that ends.

storewanderer wrote: ↑January 5th, 2018, 6:58 pm Clearly they are trying to minimize disruption, minimize lost revenue, and minimize costs by doing this.

The end result is an undersized store remains undersized. The token remodel is taking place which is pretty industry standard when you cancel more major plans (like what Kroger has done where they cancel development of an approved Marketplace store).

The old Safeway had a good understanding of projects that took many, many years to plan and get approval for. It is a good thing they were patient, or they'd be sitting on a bunch of old undersized, out of date stores all over the bay area and Lake Tahoe. At this point, given the new company's financials, they probably need to focus on projects that happen a little faster and start to get them ROI faster.

While Safeway did do a reasonable job of keeping up their store base in the Bay Area, it was at the expense of the other divisions. Given that the Sherman Oaks rebuild is going to be underway (another project that the old Safeway probably pushed hard for years to procure), Albertsons must have decided that Monterey Avenue (unlike Sherman Oaks) wasn't worth a near-total rebuild that would close it for a year. Yeah, the store is small but it's a local neighborhood store in an urban area (I have to laugh when they consider the 41,000 square foot replacement store as "supersized").

pseudo3d wrote: ↑January 5th, 2018, 8:26 pm ...(I have to laugh when they consider the 41,000 square foot replacement store as "supersized").

My sentiments exactly! Then again, finding a parcel that would hold a 50 - 60K square foot store in SF would be darned near impossible.

storewanderer wrote: ↑January 5th, 2018, 6:58 pm
At this point, given the new company's financials, they probably need to focus on projects that happen a little faster and start to get them ROI faster.

...or don't require capital.