What used to be a place to buy a gallon of milk and some loaves
of bread is now a coffee bar, bank, wine shop and specialty bakery.
The once-simple grocery store has evolved into a one-stop shop
serving a range of customer demands, and the changes are leaving
shoppers having to navigate through their weekly trips.
What used to be a place to buy a gallon of milk and some loaves of bread is now a coffee bar, bank, wine shop and specialty bakery. The once-simple grocery store has evolved into a one-stop shop serving a range of customer demands, and the changes are leaving shoppers having to navigate through their weekly trips.
The trend of grocery stores offering everything from postal service to prepared meals began in the 1990s, said Dave Heylen, spokesman for Sacramento-based California Grocers Association. But a handful of large chains – such as Pleasanton-based Safeway and Raley’s, which owns Nob Hill Foods in Gilroy, Morgan Hill and Hollister – continue to innovate, adding banks, imported wine selections and full-service delis to their stores.
“The changes we’re seeing are retailers trying to retain shoppers,” Heylen said. “The retailers are seeing changes in consumer lifestyles, family makeup and shopping habits, and the retailer is just reacting. But it’s not just reactive. Some retailers are proactive, and they’re trying to stay ahead of the curve.”
That might mean chains will have to be increasingly innovative in what they offer customers.
A handful of chains are beginning to experiment with in-house travel agencies, Heylen said, and some Raley’s and Bel Air stores – a chain also owned by Raley’s – offer free daycare for children with trained supervision while parents are shopping, said Jennifer Ortega, spokeswoman for Raley’s.
The Nob Hill stores in the South Valley offer Java City coffee bars, full-service delis, specialty bakeries and a free monthly magazine with recipes and tips for healthy eating on the go.
“Right now, one of the biggest issues is convenience,” Ortega said. “People want to be able to take care of multiple tasks at once.”
Catering to consumers’ busy lifestyles is the image Safeway wants to push. The company recently launched a $100-million ad campaign – the most expensive in Safeway’s 79-year history – featuring Safeway’s new logo and motto, changed from “giving our best” to “ingredients for life.”
According to a company statement, the campaign comes after more than two years of extensive consumer research and will capitalize on the company’s proprietary brands, including Rancher’s Reserve tender beef and Signature Soups and Sandwiches. Safeway also owns grocery chains Vons and Pavilions.
The interior of the stores will change to the company’s self-billed “lifestyle format,” with more hardwood floors and subdued lighting. Many stores also will feature natural and organic food sections, full-service meat counters and bakeries, floral design departments, sushi bars and olive bars. There are 142 lifestyle-format stores in the United States and Canada, and Safeway plans to open or remodel another 300 this year.
The makeover is one example of how grocery chains are forced to choose between offering low prices – the selling point of giant discount stores such as Wal-Mart – or more upscale fare – similar to products sold in stores such as Whole Foods and Trader Joe’s, both of which tout their organic, health-based focus.
According to Heylen, the extra amenities do not drive up the price of products for consumers, as price is based more on competition.
“You can make those changes (to the price of products), but if the price becomes too high, you just can’t afford to do it. You’ll lose too many customers,” he said. “Some stores are more concerned about service and selection rather than price, and some are more concerned about the price.”
The full-service deli and in-house Starbucks are the most popular services at Morgan Hill’s Safeway in Tennant Station, said Kelly Foreman, the store’s assistant manager. A lifestyle-format Safeway unveiled late last year, the store is open 24 hours, includes a U.S. Bank, a wide selection of artisan breads and wine, as well as a nearby gas station on the southeast corner of Monterey Road and Tennant Avenue.
“I’ve seen dramatic changes in what’s considered customer service,” said Foreman, who has worked for Safeway for 12 1/2 years. “We’re trying to cater to a wider variety of customers who are interested in looking for higher-end products.”
The 54,000-square-foot Tennant Station Safeway is a reincarnation from the mid-1990s, when the store was torn down from that location and moved to East Dunne Avenue and Highway 101. The move was partly a response to competition from Nob Hill across Monterey Road in the Vineyard Town Center.
That Nob Hill, now celebrating its grand re-opening, recently underwent a remodel that doubled its floral department as well as added a hot, prepared foods section and an organic foods section, Ortega said.
Catering to different ethnicities – especially Hispanics and Asians – is another trend creeping into Northern California grocery chains, Heylen said.
“Ethnic marketing is more popular in Southern California, but we’re beginning to see it here,” he said. “The formats of stores are changing to meet these growing segments of California’s population. And it’s not just a matter of putting up a couple of piñatas. It’s more than that – it’s looking at the shopping habits of those people, and it’s making retailers look at how they offer their product.”
Carolyn Suner, a 43-year-old Gilroy mother, appreciates the wide selection of high quality, nutritious food she finds at Nob Hill on First Street.
Though she loves the store’s deli and produce sections, she doesn’t see the need for extra services such as banking and coffee.
“I usually go shopping in the afternoons, and I don’t drink coffee then,” said Suner, browsing the store’s bread selection Thursday afternoon with her 5-year-old-son, Garrett. “And the bank, I don’t ever use the bank. But I love this store. There’s so much here, and it’s really convenient. I can get everything I need in one place.”
For some people, the extra amenities are enough to drive them away from the sometimes-overwhelming chain stores in search of smaller, more to-the-point markets.
Rob Hoff, owner of the 800-square-foot Village Market in Hollister, said he hasn’t noticed a dip in business as a result of the expansive chain stores, mainly because some people don’t want a sensory overload when shopping for groceries.
“I haven’t seen an effect at all,” Hoff said. “Most of my customers want to come in, get what they need and leave.”
