Supermarkets become endangered species in S.F.

It was business as usual at the Cala Foods supermarket on Nob Hill this week. Customers lined up six deep at the cashiers and shoppers crowded the well-stocked aisles.

So why is the store closing in 2010?

The simple answer is money. Although Cala is making money, the profit margin for a large supermarket isn't large. Food costs are up, vendors are charging more to deliver products. Wages and insurance costs are rising.

But more than that, supermarket sites are some of the last large real estate lots in the city. Eager developers are making such generous offers that store owners would be crazy to turn them down. No wonder supermarkets are an endangered species in the city.

Increasingly, they are being replaced by specialized markets, places like Whole Foods, Trader Joe's, and the new Fresh and Easy markets from the United Kingdom. Boosters say those stores are no more expensive than the old neighborhood supermarket, but everyday shoppers would disagree.

Those new-generation markets specialize in selling their own products. Rather than getting familiar name brand items, like Kellogg's cereal or Velveeta cheese, patrons find store-brand offerings. Want a generic package of shredded cheddar? Sorry, not available. However, if you'd like a nice semi-soft Gouda, Whole Foods is the place for you.

And that's fine, except for those on a fixed income, who are looking for toothpaste, cat food and Cheerios.

Click here to read the whole article by C.W. Nevius in the San Francisco Chronicle (9-18-08)