Save Mart to build new store in Redding

[storewanderer]

http://www.redding.com/business/local/p ... 87881.html

The location is a little bit iffy in my opinion but it is fairly high traffic. Rather scary at night at the gas stations at that offramp. I don't think Save Mart will do well in Redding with its pricing or current merchandising strategy. I am really not sure what they are doing opening new stores at all given their situation. I hope they are better at opening new stores than they are at remodeling existing stores to Food Maxx because the projects in Nevada involving stores that closed last March are moving slow as can be. It looks like work stopped the past couple weeks after they demolished bakery/deli/seafood out in Sparks. Redding is a very interesting choice for a new store location. Also interesting that Raleys initially was interested in this site but passed it up. Raleys also closed its South Redding store recently. Raleys retains a good volume store in North Redding. Safeway has two stores in Redding one is good volume the other appears to be okay volume. Holiday has 3 stores in Redding, one is a very nice and good volume store, one is very small but seems busy, and the other is a larger Sav Mor that appears to do so so. Holiday's pricing is significantly lower than Save Mart in both of their formats and has far better produce, meat, and deli than Save Mart has.

Opening a new store in Redding makes little sense for Save Mart. It is far from other Save Mart locations (next closest is in Chico about an hour away and that store doesn't do particularly well and is in very poor condition; redundant and across the road from a much nicer larger Raleys). Redding is more of a lower middle class area, especially where this store is going. So opening a new store here with "significant food service" does not make sense. They don't appear to know the market. I would probably build a new Food Maxx in this location as it would be more appropriate and Food Maxx is already present in that area (one in Redding, one in Red Bluff, etc.). As a lone remote Save Mart, it will be difficult for them to supervise and manage. There are no existing stores nearby to pull experienced employees from. The company seems to be having issues managing its current store base so opening a new store that is rather isolated from the rest of the store base appears to be something that is a questionable move.

Years ago there was an Albertsons in Redding about a mile from where this new store is going (currently a 99 Cents Only I believe) which closed in the mid 1990's. I don't see how Save Mart will make it. Also down in Red Bluff the Food Maxx there is actually a former Lucky which closed in the mid 1990's. This is a region that has historically favored discount format stores.

[lake]

Given that Raley's has had trouble making Redding work, I have little hope for SaveMart given that their pricing scheme is very similar to Raley's despite their lower quality. I would expect this will be the new SaveMart interior which is not only horrid, but also meant for more hispanic demographics which Redding is not. Seems like a recipe for disaster to me, but that's how SaveMart has felt as a whole for a while.

[storewanderer]

They will have to do something different than something that is like a hispanic format in Redding because Redding doesn't seem to have many hispanics. I also think that sort of format may be a turn off for the majority of the customers in Redding. Redding is a bit different of a place than most of northern California.

So while we have Raleys opening new stores in areas with great demographics that really need stores like Truckee, Rancho Murieta, etc. and Safeway doing infill with new smaller stores throughout the bay area, Save Mart builds a store in an area that first off does not need a store, secondly does not have great demographics, third is very remote from the rest of Save Mart's bannered stores, and fourth is in a lousy part of the town.

Oh well, at least they are trying? I should not be so hard on them. I have been very frustrated with Save Mart since day one of its conversion and subsequent ruining of the former Albertsons in Nevada which were well liked medium to high volume stores that did a pretty good job on perimeter execution especially toward the end (Save Mart was better at running stores with the Albertsons banner and Albertsons programs than it is at running its own format... they should have tried to get some sort of franchising/licensing agreement). Perimeters flopped after Save Mart, I was sold rotten chicken and rotten deli meats at multiple locations, prices were way higher than before, private label mix and quality fell which price rose, quality of perimeter plummeted, and mix everywhere started to disappear.

[lake]

They will have to do something different than something that is like a hispanic format in Redding because Redding doesn't seem to have many hispanics. I also think that sort of format may be a turn off for the majority of the customers in Redding. Redding is a bit different of a place than most of northern California.

The problem with Redding (and anything really north of there) is that it is basically Oregon in terms of demographics. SaveMart has three formats that they're throwing around right now and the only one that would work is already present in Redding. The Lucky concept focuses on being an international market while the SaveMart concept is a conventional/hispanic hybrid. Both of those do not fit the demographics of Redding which is overwhelmingly white. Adding a fourth concept onto their labels is just going to be an even bigger mess for their already strained distribution.

Funny side note, if you look up the brochure for this property, it is updated to include SaveMart, but the architecture is quite clearly late-2000s Raley's store design. Given that this is SaveMart, it would be expected that will choose to not revise this at all and instead have a store that looks exactly like the newer Raley's you see in Sparks and Modesto. https://trainorfairbrook.com/attachment ... 5-1261.pdf

[storewanderer]

So, why is everything to do with this store using the old Save Mart logo? Did they already decide to not move forward with their new logo?

That looks like a new Raleys all right. Right down to the "Fresh market" sign.

I am guessing the developer was having trouble getting a grocery store anchor to make this a go and for some reason Save Mart decided to sign on. It will be interesting to see what other retailers locate at this center. Safeway already has ample stores nearby and Raleys seems to have wisely passed this location up. I am kind of surprised Raleys was interested in the first place but maybe they were expecting some sort of new development nearby (where?). This may have been a logical location for a new Ray's Store back before that chain ran into financial trouble but that would have probably been an even worse option here than Save Mart.

Since 2009 when Raleys was interested in this site, new additions to the area are Wal Mart Supercenter is in Redding about 2.5 miles from this store and another Wal Mart Supercenter about 5 minutes down the freeway from this store in Anderson. Both nice busy stores. The Raleys that closed in South Redding was a poorly located store and a very low volume operation. I suspect it did well before Safeway improved its two Redding Stores in the 90's (rebuilt or expanded or relocated, not sure, but both are clearly modernized).

I also think this store is a crummy location and has less than perfect access. If you look at the overhead map there are a lot of houses to the east of the store (Victor Ave., etc.) but those customers if they coming off the highway and were "on the way home" the store is on the wrong side of the street and getting to it requires going left and then getting out of it and back toward Victor Ave. would require two more lefts. It is on the right side of the street for people who are exiting the highway then driving north on Churn Creek but there are really not that many houses there. Hartnell seems to be commonly used to get to the houses that are in East Redding.

Save Mart is also completely out of touch with proper merchandising in the Redding area. They don't even sell Franz breads (every other chain there does; Wal Mart also uses it for private label bread). You go to Safeway, Holiday, or Raleys up there and it has all the usual NorCal bread brands plus all of the Franz products. Franz products are excellent quality. WinCo and Wal Mart also have a very ample assortment of Franz products. Franz distribution line starts from Oroville, Colusa, Gridley north and has a depot/day old shop in Redding. Save Mart has at least 1 Save Mart and 3 Food Maxx locations in Franz service area but they for whatever reason have never bothered to pick that brand of bread up.

[klkla]

I wouldn't read too much into the logo. That's clearly a PhotoShop overlay made by the developer covering the Raley's logo from the original plan. That document was not made by SaveMart.

[lake]

I wouldn't read too much into the logo. That's clearly a PhotoShop overlay made by the developer covering the Raley's logo from the original plan. That document was not made by SaveMart.

I don't think it's really covering anything as the Raley's logo is much more stretched vertically. ( http://www.raleys.com/images/imagescontent/1265641.jpg ) Probably more just the case of the developers googling "SaveMart" logo and plopping it on the side for marketing reasons. But I agree, nothing to see there, they'll most likely use the new (horrid) logo.

I am guessing the developer was having trouble getting a grocery store anchor to make this a go and for some reason Save Mart decided to sign on. It will be interesting to see what other retailers locate at this center. Safeway already has ample stores nearby and Raleys seems to have wisely passed this location up. I am kind of surprised Raleys was interested in the first place but maybe they were expecting some sort of new development nearby (where?). This may have been a logical location for a new Ray's Store back before that chain ran into financial trouble but that would have probably been an even worse option here than Save Mart.

You have to remember this was back in 2008 when the housing bubble was still existent. It is my assumption that the open land between this sight and Redding was planned to be a large development. Raley's was probably interested in this new development and was planning to be an early entrant to this specific market as they almost always have been (Bel Air Woodland & Natomas for example.) Raley's is actually quite good at this and they run an outstanding program that when a new neighborhood is built near a Raley's store, they will pick a Saturday morning and host a breakfast type thing for the neighborhood. When the market collapsed, Raley's stalled all new growth and has recently just begun but with a much more strategic manner. Although they were likely approached about this store again, the uncertainty in Redding, especially after just closing a store there was probably too much for them. Even though NorCal has recovered tremendously, home construction is much more controlled and is usually only begun if a majority of the homes are sold. This is a risky gamble for anyone since they'll have to lure shoppers away from their current habits and into their new store that honestly doesn't offer that much. Quality is on par with Safeway and although price is a little better than Safeway as of recent, there are plenty of other competitors that have already lured those iffy on Safeway away. It just doesn't seem like there will be many people left that are frustrated enough to change grocers with all the competition Redding has for it's relatively small size.

[storewanderer]

Good point. I can tell you that Sparks Raleys (Wingfield Springs) struggled very badly its initial years. I think it does okay now (a Scolaris nearby closed and the Safeway that is 10 minutes away but along the commuter route and used to capture a lot of sales from that neighborhood has tanked operationally and I think Raleys has picked up some of its business, but for the Raleys, it was not a good situation its first 4 or so years of operations. Started to close at 9 PM. Tore out the hot chinese food department (actually just covered it with boxes of chips). Extremely minimal produce department. Part of dairy filled with soda/water. Tore out the olive bar (covered with stacks of wine).

Raleys in general does not do very well in Nevada. Its store volumes are quite a bit lower than what they do in California. But they do better than the other conventional format stores up here do, despite not doing as well as the rest of the chain. Smiths is the most successful conventional in the Reno market, a real come back story on that one from where they once were with better pricing, improved perimeters, and locating stores in lower middle class areas that the NorCal chains were too expensive and too stuck up to open stores in, like Dayton and Lemmon Valley which have been extremely successful stores for Smiths. The Wal Marts and WinCos are extremely high volume here. I actually think the store type that does well in Reno is similar to Redding and up here nobody is shopping Save Mart unless they have to and it is mostly very small size transactions with many involving alcohol and packaged goods (perimeter business at Save Mart is very low since their perimeter is absolutely depressing). Albertsons was similar to Save Mart here, but had more foot traffic and there were a few people who actually did big shops there and the perimeters at Albertsons sure had more action than Save Mart (especially meat/seafood and deli).

[lake]

https://trainorfairbrook.com/attachment ... 5-1261.pdf

Was curious and looked to see if there was an update on this at all. Looks like they changed the architecture around a bit, and although I do not like the new Save Mart logo in any way, this architecture doesn't look terrible. Also, Costco has signed on for a location across the highway so that may hurt or help them a little bit. Costco in my experience drives traffic to an area, but also is a major competitor in the grocery business. At least the site is somewhat more viable with Costco's real estate team deciding to go for it. Construction for the SaveMart is either starting soon or has already started. Should be interesting.

[storewanderer]

I have been seeing a little more of the new Save Mart logo in the current stores mostly on labels in perimeter department or on some bags and I am starting to like the logo a bit because it brings us colors that we do not often see in store logos (where red seems to be the favorite color). Save Mart is not a destination store, it is a neighborhood store, and I do not see being near Costco helping them much. It has the potential to hurt if the high traffic of Costco makes it more difficult for people to access the Save Mart, also. Given they are on opposite ends it should not really hurt much.

It will be interesting to see what impact the move of Costco has on the other retail area in Redding which are closer to the current Redding Food Maxx, WinCo, and Wal Mart Supercenter. You can guess which store does the least business of those three...

Maybe this new Save Mart would actually work better as a Food Maxx.

I also think that site makes sense for Costco as it is more central to surrounding communities Anderson, Corning, etc. that people drive from to shop at Costco. I highly doubt any of those shoppers driving from those places will be interested in Save Mart. Some of them may be interested in a Food Maxx, though.