Photo by Rebecca WilokowskiWhole Foods’ Launch Slows Local Business January 2008Whole Foods’ Launch Slows Local BusinessBy Kerry FleisherA number of small businesses located on Potrero Hill’s traditional 18th and 20th streets shopping district have experienced sales declines over the past several months. And many point to the mid-September opening of Whole Foods Market on Kansas Street as the cause. Yet the Hill’s retailers are confident that Whole Foods’ novelty appeal will soon level-off, and local residents will return to the convenience and affordable pricing of local grocers, bakeries, and cafes. “Business is coming back now that new and different is over,” said Lester Zeidman, owner of Good Life Grocery on 20th Street, one of Potrero Hill’s oldest independent grocery stores. “It’s an expensive place to shop, people realize that.” With 192 stores across the nation, Potrero’s Whole Foods Market features the chain’s first mini-spa, stacks of organic and gluten-free products, a street-side café and more than 700 varieties of wine. But for many Potrero Hill residents, Whole Foods, the country’s first nationally-certified organic retailer, isn’t the most economical place to shop. “It’s extremely expensive. They target certain customers. They know what they are doing,” said Marwan Halteh, owner of New Potrero Market on 18th Street, whose sales dropped 10 to 15 percent in September and then steadily crawled back. “I think at first, people just wanted to see the spectacle of it [Whole Foods],” said Kim Gousseu, a Good Life Grocery employee. Road construction along Connecticut and 20th streets in the early fall caused sales to slow for many Potrero merchants, according to Halteh. Whole Foods, which offers a private parking garage with 100 spaces, opened at the tail end of the road construction. “It’s hard to differentiate between the parking crisis in Potrero Hill and Whole Foods opening, in terms of how they affected sales,” said Zeidman. “They occurred one on top of each other.” Allan Ransley, owner of Jay’s Deli on 20th Street, said merchants were hesitant to identify Whole Foods as the sole source of dipping sales early in the quarter. “Many business owners say sales usually drop during the fall because of the school year starting. Then they say lower sales are a result of the holiday season,” said Ransley. “But when you see a business owner who is literally in tears because of the Whole Foods opening, you wonder.” According to Halteh, “The opening affected the whole neighborhood, even restaurants, at first. But things seemed to go back to normal.” Whole Foods Market wouldn’t release sales numbers for their Potrero Hill outlet, but local rumors suggest that the store’s receipts spiked their first month and then significantly dropped well below the corporation’s expectations. The Potrero Hill Whole Foods Market is part of a joint venture conceived by Lambert Development LLC, the commercial developers of The Potrero building, a mixed-use condominium complex that leases its ground floor to Whole Foods. The Potrero Hill Whole Foods Market is the company’s third San Francisco store. The Whole Food grocery chain features sustainably-harvested fish, organic produce and meat, and with the new mini-spa at the Potrero Hill store, adds on-site estheticians and massage therapists to its appeal to health and socially-conscious consumerism. But while Whole Foods boasts every conceivable flavor of Odwalla juice and claims to purchase wind credits to offset 100 percent of its energy consumption, many argue it doesn’t fit the neighborhood bill. “Whole Foods doesn’t have wine tastings with neighborhood folk,” said Ransley, who hosts periodic wine tastings at Jay’s Deli that feature bio-dynamic wines. “Or at least not yet,” he laughed.
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