The Disappearing Supermarket, Take Two

We recently posted about the phenomenon of the shrinking urban grocery market. Moving away from the mega-supermarket layouts of decades past, grocery chains are headed toward smaller footprints, more focused selection, and prepared meals. In cities like San Francisco, developers are buying up the big supermarket lots and erecting mixed-use buildings that sometimes—but not always—include smaller specialty markets such as Whole Foods, Trader Joe’s, or Fresh and Easy.

The San Francisco Chronicle is worried about the trend. “Boosters say those stores are no more expensive than the old neighborhood supermarket,” the piece posits, “but everyday shoppers would disagree.”

Part of the problem, the piece says, is that the “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,” the piece continues, “except for those on a fixed income, who are looking for toothpaste, cat food and Cheerios.”

In fact, one person quoted in the piece forecasts what he sees as a dire possibility for San Francisco:

’Are we going to become a city of farmers’ markets?’ asked Matt Holmes, a principal at Retail West Inc., a San Francisco property, tenant and real estate service. ‘What you are going to get is a series of chef-driven markets with highly specialized, prepared meals. You’ll end up canoeing to Marin to get groceries.’

By setting up a “shredded cheddar” versus “soft Gouda” dichotomy, the Chron piece invokes some—dare I say it—touchy class issues. Markets like Trader Joe’s do in fact carry “toothpaste, cat food and Cheerios,” and, at least in San Francisco, they are not significantly more expensive than the versions found at Safeway. In fact, one Seattle study found that independent stores such as Trader Joe’s “offered a greater variety of healthful foods at cheaper prices than major supermarkets.”

As for those farmers’ markets? Some people find the produce there is the same price or cheaper than at the supermarket, and it tends to be better quality. The fact that, in general, high-calorie food is cheaper than fruits and vegetables is entirely unrelated to supermarkets, and instead has everything to do with USDA subsidies.

Now, how much for that can of worms?

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