SAN RAFAEL -- Costco Wholesale
will have fresh competition in the warehouse grocery store
segment when southern California-based Smart & Final Inc.
opens two more North Bay stores this year and 2006 as part
of a nine-store Bay Area expansion.
City of Commerce-based Smart & Final signed a 10-year
lease late last year for the 23,600sf former Marin Outdoors
store at 935 Andersen Drive, sandwiched between U.S. 101 and
Interstate 580 in San Rafael. Sporting goods retailer Marin
Outdoors operated that store from 1961 until it closed all
three stores in 2003 as the economy dipped, according to Jerry
Suyderhoud, an Orion Partners real estate agent who represented
building owner MA-ME.
Smart & Final plans to open the San Rafael store by September
after extensive renovations, according to Steve Cutter,
a retail real estate agent with Terranomics
who has been helping Smart & Final find as many as nine
new Bay Area locations.
In addition to the San Rafael lease, Smart & Final inked
Bay Area deals last year in Sunnyvale and Gilroy. He says
another four Bay Area deals are pending for this year in Santa
Rosa, Hayward, and on the Peninsula.
Next month, Smart & Final anticipates closing escrow
on an undisclosed property in Santa Rosa, once entitlements
for the retail-zoned land are secured, according to Mr.
Cutter. The company plans to develop the store itself.
‘Smaller, faster warehouse store'
Smart & Final has had a North Bay presence since 1998.
At that time, the company acquired Portland, Oregon-based
United Grocers and picked up some four-dozen Cash & Carry
stores throughout the Pacific Northwest, including one in
Santa Rosa.
The chains overlap in Sacramento, Modesto, and the Bay Area
but are complementary, according to Smart & Final spokesperson
Randall Oliver. Cash & Carry caters to restaurants and
foodservice firms with large-quantity groceries and supplies
plus culinary equipment. Smart & Final appeals to consumers,
too, by offering smaller quantities with "consumer-friendly"
store signage and cold storage and alcoholic beverage sections.
"Customers do not come to Smart & Final for tires
or televisions," Mr. Oliver says, contrasting the chain
with competitors Costco and Sam's Club. "But they do
if they need supplies for their small restaurants or are stocking
their home kitchen."
Founded in 1871 as Hellman-Haas Grocery Company, Smart &
Final started the self-service wholesale store concept in
Los Angeles in 1923. Smart & Final markets itself as the
"smaller, faster warehouse store" where customers
can purchase from a narrowly focused but wide selection (8,000
items) without long checkout queues. Each store has 20,000sf
of space ideally, averages $8.5 million in annual sales, and
employs 20. Customers don't have to be members.
Compare that to the average 150,000sf Costco store with $119
million in yearly sales per location, according to BusinessWeek.
Costco opened stores in Santa Rosa in 1986, Novato in 1992,
and Rohnert Park in 2002.
All together, the company has 232 Smart & Final and Cash
& Carry stores on the West Coast, including a joint venture
in Baja California. In the past two years, the company divested
a Florida expansion endeavor as well as its foodservice direct
delivery business to focus on bolstering its West Coast stores.
That shift in resources has allowed the company to return
its net growth to 10-15 stores a year from three last year,
according to Mr. Oliver.
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