Safeway Inc. will combat an aggressive crop of rivals with an expansion that includes nine new stores in the West -- of which six will be in the Bay Area, the Pleasanton-based retailer said Monday.
Pleasanton, Castro Valley, El Cerrito, Campbell, Los Gatos and Burlingame are the cities where Safeway plans to revamp or open stores this year, said Karl Schroeder, president of Safeway's Northern California Division.
"We are not just in a defensive stance," Schroeder said. "We also are going on offense in terms of building our business and building our market share."
In addition, the grocery giant is working to obtain city approvals for stores in Pleasant Hill, Emeryville and Berkeley. The company also is eyeing a new store in the Oakland hills on Redwood Road, and it remodeled a store in Oakland's Montclair district.
The pace of store openings in the western United States is more intense than has lately been the case for Safeway, the company said.
"We are clearly opening more new stores in 2011 than we have opened in any one year over the last four or five years," Schroeder said.
In recent months, an array of Safeway rivals have disclosed plans for new stores in numerous spots in the Bay Area.
During 2011, Berkeley-based Grocery Outlet, Fresh & Easy, Foods Co., Sprouts Farmers Market and Henry's Farmers Market each plan to open at least one new store in the Bay Area.
Fresh & Easy plans 13 stores in the Bay Area. Foods Co. plans two Oakland stores. Henry's plans one store in Walnut Creek, and Sprouts is opening a store in Dublin.
"Our new stores aren't a knee-jerk reaction," Schroeder said. "They have been carefully thought out. We are thrilled they are coming together at this rate."
The company also will create plenty of jobs through the expansion. Each new store will have about 200 employees, on average.
In addition, Safeway intends to occupy a former Mervyn's in Campbell and turn it into a 55,000-square-foot store on West Hamilton Avenue near San Tomas Expressway. In Los Gatos, a demolition and reconstruction of an existing Safeway store will create a new 42,000-square-foot market. In Burlingame, a similar reconstruction will produce a 52,000-square-foot store.
"We often are taking advantage of sites in great locations where retailers had left," Schroeder said. "The empty locations create new opportunities for us."
Even though Safeway has a strong brand in the Bay Area, the company is wise to look for expansion opportunities where it can.
"They want to remodel the stores that need to be updated," said Mike Costa, a broker with commercial realty firm Terranomics. "But they also are looking to seize the opportunity to get into a trade area."
Analysts think that Safeway is wise to attempt to find vacant retail properties for expansion.
"They are taking advantage of the price bargains out there," said Robert Reynolds, principal analyst with Moraga-based Reynolds Economics, a retail consulting firm. "There are a lot of empty boxes around that can be filled."
Safeway also is responding, in part, to the expansions by rival grocers.
"It's partly a defensive move, but it's also a move on offense," Costa said. "But Safeway is a great operator, they do a great job, and they are building on their great brand in the area."
Contact George Avalos at 925-977-8477.
Safeway's new stores are coming together in a variety of ways in several Bay Area cities: