Berkley-based "extreme value" supermarket chain Grocery Outlet is poised to take over the retail space formerly occupied by Miki's Farm Fresh Market at Alma Village in Palo Alto.

"Grocery Outlet will bring Palo Alto what it has needed for years, what so many drive out of town daily to buy " everyday low-cost groceries," Alma Village developer John McNellis said in a statement Monday night.

Grocery Outlet is the polar opposite of Miki's. While the defunct market's crossover format lined shelves with both name-brand and specialty products, the latter put it in the same league as Whole Foods, McNellis told The Daily News.

The supermarket chain, on the other hand, offers nothing but name-brand products at up to 50 percent off conventional retail prices. On its website, Grocery Outlet describes itself as "extreme value."

Michael "Miki" Werness closed the 18,000-square-foot market bearing his name in early April amid lackluster sales. It was open less than six months. McNellis said he is confident Grocery Outlet would not suffer the same fate.

"Miki's failed for a variety of reasons. One of the principle reasons was he was in a field that was too heavily populated. We have so many high-end markets and it's only getting worse," said McNellis, referring to the recent openings of an upscale Safeway on San Antonio Road in Mountain View and The Fresh Market at Edgewood Plaza in Palo Alto.


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Alma Village posed other challenges that Miki's simply couldn't overcome, McNellis said.

"It's isolated. It's on the middle of the block," he explained. "You have to want to go there. That was Miki's problem. Miki's was great. It was the nicest, prettiest supermarket in all of Palo Alto, but it wasn't enough of a value proposition."

McNellis said the deep discounts offered by Grocery Outlet would draw shoppers to Alma Village.

"People will say," he said, "'Aha! If I go a mile out of my way, I can save $50 on my groceries.'"

McNellis said Grocery Outlet contacted him about taking over the retail space at Alma Village. He added that he initially tried to bring in another high-end market, but no one was interested.

"We are excited to bring Grocery Outlet to Palo Alto," MacGregor Read, co-CEO of Grocery Outlet, said in a statement Monday. "We received many requests to open a store in the area, and we're thrilled to be able to offer Palo Alto-area residents the opportunity to save 50 percent on groceries and other merchandise."

The closest Grocery Outlet stores to Palo Alto are on Broadway in Redwood City and Homestead Road in Santa Clara.

McNellis said internal sales studies and forecasts conducted by the supermarket chain have concluded that all of the new store's sales will come from Palo Alto and Mountain View. Traffic, meanwhile, is expected to be about the same as it was at Miki's Farm Fresh Market.

The lease with Grocery Outlet closes another chapter in the tumultuous history of Alma Village. For years, McNellis fought with residents to redevelop the 4.2-acre site, then known as Alma Plaza. The city council's decision to approve his plans for 37 single-family homes in 2009 was largely contingent on a new grocery store to replace the former Albertsons.

The development also includes 14 below-market-rate apartments and a small public park.

Email Jason Green at jgreen@dailynewsgroup.com; follow him at twitter.com/jgreendailynews.