Noe Valley Voice September 2005

Ralphs Looking for a Buyer for Bell Markets

By Corrie M. Anders

The Bell Market grocery store is pulling out of Noe Valley--and the upscale Mollie Stone's may be pulling in.

Bell is the only full-scale grocery in the neighborhood and has been a landmark since 1968. But the 24th Street supermarket is on the chopping block, and a sale may be consummated in the near future.

Bell is a subsidiary store of Ralphs Grocery Co., a giant retailer based in Compton, Calif. In addition to unloading the 24th Street store, sources familiar with the situation said Ralphs is seeking to sell all 20 Bell Markets and Cala Food Stores it owns in Northern California, including nine in San Francisco.

The corporate parent has made no official statement about the decision to shutter the Bell and Cala stores, which it acquired in the mid-1990s. The company has been closing small, underperforming stores throughout Northern California.

"At this point I can't comment,'' Ralphs spokesman Terry O'Neil told the Voice. "Keep checking in."

But word has been leaking out as Ralphs, itself a division of national retailer Kroger Co., conducts talks with potential buyers, vendors, and other firms that would be involving in closing the stores.

Michael Sharpe, who heads the union that represents grocery workers, said recently that he has heard the buzz that Ralphs was preparing to sell its Bell and Cala stores.

"I don't think it's much of a rumor," said Sharpe, president of the United Food and Commercial Workers (UFCW) Union, Local 648. "I think it's a fact that the company is selling stores. I don't know if it's the complete list or individual stores up for sale."

Sources told the Voice that Mollie Stone's, a fashionable boutique that started 10 years ago as a natural foods and organic food market in Mill Valley, has been in talks with Ralphs to take over the Bell location on 24th Street.

"It's too sensitive of an issue for me to address," said David Bennett, who co-founded the chain with business partner Mike Stone. "I think what I can say is that we have two stores in San Francisco and we're always looking to expand in the city."

Other businesses rumored to be interested in the site include Raley's, a Sacramento-based grocery with 114 locations in California; specialty retailer Trader Joe's, and Longs Drug Stores, a Walnut Creek­based drug chain.

Those companies refused to say whether they had any interest in setting up shop in Noe Valley. Longs spokeswoman Farra Levin said only that the company was in "an accelerated growth process" and that "we're always extremely interested in real estate that will accelerate our expansion." Raley's spokeswoman Nicole Townsend said the privately-held firm does not share information about its new-store plans.

If a supermarket does not move into the Bell site, Noe Valley residents would have to go outside the neighborhood to shop. Three smaller stores that once served Noe Valley have closed their doors: Real Food Company shut down its 24th Street operation two years ago on Labor Day weekend, and Mikeytom Market also folded its Church Street operation in the summer of 2003. For a decade or so until the mid-1980s, Bell operated a second Noe Valley branch at 1333 Castro Street. The store, known affectionately as "Little Bell," is now a Walgreen's drugstore.

Safeway Adds Sushi and Starbucks

Intrigue over Bell's looming withdrawal comes as several supermarkets have designed stylish new stores and brought in higher-quality groceries and services to lure customers to locations on the edge of Noe Valley.

In January, Mollie Stone's took over the old Tower Market at 635 Portola Drive in the Twin Peaks area--less than a five-minute ride from 24th Street--and stocked the store with its trademark specialties. Shoppers can pick up everything from fresh sushi, fresh lobster, and crab to kosher meat that is cut on the premises under the supervision of Vaad Hakashrus of Northern California.

Safeway is perking up the stodgy image of its store in the Diamond Heights Shopping Center. The store is being remodeled with a "lifestyle" format that emphasizes a sophisticated décor--walls painted in earth-tone colors, subdued and warm lighting, and laminated floors in the produce section. The makeover includes an expanded organic produce selection, new sushi and salad bars, a larger deli, and a new Starbucks kiosk, where you can buy such exotic fare as a mint-mocha-chip frappuccino.

Safeway spokeswoman Jennifer Webber said the remodeling project, part of a $100 million campaign to renovate stores around the country, is expected to be completed at the end of October.

Bell, which recently spent $200,000 to remodel the 13,000-square-foot store, employs about 50 workers on 24th Street. The imminent sale has created some anxiety among the staff, who wonder if they will lose their jobs or what kind of working conditions will exist under a new owner. In the past, Ralphs has transferred workers from closed stores to other locations, or otherwise helped them to find new jobs.

Bell has about four years left on its 24th Street lease. The real estate firm which handles the Bell lease said it has received no official word of any pending lease changes. "As far as we're concerned, we're prepared to honor the lease," said Mark Campana of Anchor Realty, which represents the property owner.

Mixed Feelings About Bell

The prospect of a Bell pullout has left residents with mixed emotions. "I'm sorry they're leaving," said Eleanore Gerhardt, who lives across the street from the store. "It's a very nicely run store," and "the people who work there and the managers that I've known over the years have been very nice people."

Gerhardt said she is "more concerned about who's moving in." She said Mollie Stone's and other high-end groceries thought to be potential buyers are "too expensive for me."

Other residents, such as neighborhood historian Bill Yenne, look forward to a change. "We deserve a grocery chain that takes pride in their property and hires staff that understands the merchandise and stocks better-than-average products. Mollie Stone's is one of those," said Yenne. "It is typical of a better class of grocery chain."

But longtime resident Paul Kantus said he thinks Bell is "doing very well right now," and that he doesn't believe there "will be many changes" under a new owner. "I would assume that Mollie Stone's will keep it up," said Kantus, who is also president of the East & West of Castro Street Improvement Club.

Ralphs, which operates a Cala Fresh Fare store in the Castro District at 4201 18th Street, has been aggressive in closing stores throughout Northern California that do not perform to its expectations. In January, the company emptied the shelves at a Cala at the corner of Mission Street and Alemany Boulevard. The store had more than 30 employees. Ralphs is trying to lease the 18,682-square-foot space for nearly $33,000 per month.

The Bell stores have a long history in San Francisco. Dominick Bell and two brothers launched the grocery in the aftermath of World War II. Through a series of mergers and acquisitions in the 1980s and '90s, the Bell and Cala stores became a division of Ralphs. Kroger acquired Ralphs in 1990, and the Bell-Cala stores became integrated into the national chain.

Ralphs Refuses to Support CBD

Rumors about Ralphs' intentions first began swirling in early summer after the 24th Street Bell backed away from a commitment to support Noe Valley's effort to create a Community Benefit District. Bell would have had the largest property assessment to finance the CBD operations.

Ralphs executives told Carol Yenne, president of the Noe Valley Merchants and Professionals Association, and Rich Hillis, the mayor's director for economic development, that the firm was reevaluating its Northern California strategy. At the time, Ralphs would not respond to their requests--including several from Mayor Gavin Newsom--for more specific information.

The owners of the Bell property subsequently agreed to step in and support the CBD effort to beautify the 24th Street commercial corridor--and the measure won voter approval Aug. 2.