The Bay Area could be in line for grocery store wars staged by companies that want to establish beachheads in the lucrative region.

The new entrants are eclectic and diverse. However, they do have something in common: The grocers want to offer high-quality foods and other items at modest prices.

A potential price war could be an appropriate balm for consumers wounded by the recession, said Bob Reynolds, principal analyst with Moraga-based Reynolds Economics, a retail consulting firm. These shoppers are eager for more grocery choices.

"The Bay Area doesn't really have intense competition for full-service supermarkets," he said. "That presents opportunities for smaller competitors to nip at the heels of Safeway."

The new entrants are:

  • Foods Co., a Kroger Co. unit, which plans to open two supermarkets in East Oakland. Each will be 72,000 square feet.

  • Fresh & Easy, which is planning seven stores for 2011. These include markets in Walnut Creek, Concord, Danville and San Jose. The stores will range from 10,000 to 15,000 square feet.

  • Sprouts Farmers Market, which is planning a store in Dublin that could open during the first three months of 2011. The store will be about 35,000 square feet.

  • Henry's Farmers Market, which intends to open a store in Walnut Creek by next summer. The market will be about 25,000 square feet.


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    "This is definitely going to increase competition in the Bay Area," said Mark Hamstra, retail editor with Supermarket News.

    In addition, several of the new grocers say they want even more sites in the Bay Area than the ones they have disclosed.

    Henry's, Sprouts and Food Co. all have begun to scout for more locations.

    "Our real estate team is actively searching for more locations," said Janet Little, a spokeswoman for Henry's Farmers Market. "We want Henry's future growth to include Northern California."

    The Henry's market in Walnut Creek would be the chain's first Bay Area store. Sprouts also is said to be seeking more stores than its existing Sunnyvale market and the planned Dublin site. The same goes for Foods Co.

    "Foods Co. is looking at several different sites in the Bay Area, including the two in Oakland," said Kendra Doyel, a Foods Co. executive. The company says it is eager to serve customers with modest incomes.

    "Oakland is a community where we can offer a great service and a great shopping experience," she said.

    Fresh & Easy, Henry's and Sprouts are seeking to cater to customers who want natural and fresh items.

    "Organic seems to be the favorite of all the supermarkets right now," said Sandra Weck, a broker with Colliers International, a commercial realty firm.

    The grocers also strive to offer low prices along with top quality. To Fresh & Easy, Henry's, Sprouts and Foods Co., that's no contradiction.

    "Customers are looking for affordable items, but also very high-quality items," said Brendan Wonnocutt, a Fresh & Easy spokesman. "People don't have to compromise on quality and price."

    The markets say their pending Bay Area invasion won't unleash a grocery glut.

    "Henry's is trying to fill that space for people who might be looking for natural beef, maybe looking for more organic produce," Little said. "Maybe groceries that don't contain a lot of preservatives, or that are gluten-free."

    Sprouts representatives say the stores feature a farmer' market theme. Sprouts sells fresh and natural meat, seafood, produce and baked goods. The stores also sell an array of vitamins.

    Still, not every model might vanquish its rivals. And in Fresh & Easy's case, the grocer hasn't been able to race ahead of its rivals in the Bay Area.

    "Fresh & Easy is 18 months behind where they said they would be," Reynolds said. "The jury is still out as to whether they will be a real competitive force."

    The stores want to be key cogs in their communities.

    "Henry's is not just a grocery store -- we walk the walk," Little said. "We partner with the community for events, or races, or walks. We want to bring that old-fashioned type of store to a town."

    With inexpensive prices for many retail properties, these stores may be the vanguard of a Bay Area grocery expansion. Shoppers could benefit.

    "The recession is providing opportunities for retailers to get into some excellent sites," Reynolds said. "This means we will have more choices as consumers."

    Contact George Avalos at 925-977-8477.