Thursday, January 31, 2008

British Grocery Chain Plans 18 Bay Area Stores

British Grocery Chain Plans 18 Bay Area Stores
James Temple, Chronicle Staff Writer
Thursday, January 31, 2008

A British supermarket chain plans to open at least 18 stores throughout the Bay Area next year, many in neighborhoods that other grocery stores have long avoided.

Fresh & Easy Neighborhood Market, the aggressively expanding U.S. division of Tesco PLC, the world's third-largest retailer, plans to build smaller than typical outlets offering prepared meals, fresh produce and perishables in Antioch, Concord, San Jose, San Francisco, Hayward, Oakland, Oakley and elsewhere.

"The West Coast is a place that likes new things and likes new ideas," said Tim Mason, chief executive officer of Fresh & Easy, in explaining the regional push. "It's a market where we think there's a desire for fresh foods, healthy foods."

The San Francisco stores will be at Third Street and Carroll Avenue and Silver Avenue and Goettingen Street, in the Bayview and Portola neighborhoods.

Shopping options in the Bayview largely are limited to the Foods Co. bulk grocery store and the small Super Save market, along with corner stores and fast-food restaurants. An October survey by the Southeast Food Access Working Group, part of Mayor Gavin Newsom's Shape Up San Francisco program, found that 94 percent of neighborhood residents would support new food options and that half frequently bought groceries at Safeway stores outside the area.

Studies routinely have linked limited access to fresh produce and inexpensive groceries to poor health in low-income and minority neighborhoods, including higher rates of diabetes, obesity and heart disease. Only 52 percent of residents of "disadvantaged communities" in the Bay Area are within walking distance of a supermarket, according to a 2002 study by the Transportation and Land Use Coalition, a partnership of regional advocacy groups.

Many stores have avoided such areas for two main reasons, said Bob Reynolds, president of Moraga retail consulting firm Reynolds Economics. There's a perception of higher operating costs related to security and theft, and lower-income customers tend to spend less per trip than white-collar suburban shoppers, he said.

"It's easier to go to a Burger King than it is to get a decent piece of fruit in many neighborhoods," said San Francisco Supervisor Sophie Maxwell, who represents Bayview and Portola. "Fresh & Easy can help that."

Ken Hecht, executive director of California Food Policy Advocates, initially said he was pleased to hear that Fresh & Easy is expanding in the Bay Area, because the company repeatedly has said it will locate in neighborhoods underserved by grocery stores. But after reviewing the list of locations, which includes stores in upscale cities like Danville and Walnut Creek, he said the company isn't doing enough.

"This just isn't going to do what needs to be done if low-income people are to avoid obesity - and that's our biggest threat to public health right now," he said.

Fresh & Easy is building roughly 10,000-square-foot stores that are about a fifth of the size of a typical supermarket and stocking a narrower selection of often less-expensive goods with a higher proportion of private-label and prepared products. The closest comparison is Trader Joe's, which packs its 12,000- to 15,000-square-foot outlets with items bearings it own brand.

Tesco opened its first U.S. store a little more than two months ago and was scheduled to open its 36th and 37th today. Most Fresh & Easy markets are in Southern California, with a handful in Arizona and Las Vegas. Tesco is investing $2 billion over five years in the division and has 140 planned locations.

The other Bay Area sites announced Wednesday are Danville, Fairfield.....

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