Say goodbye to another grocery store, Palo Alto.
Albertson's is closing its store in Edgewood Plaza around early August, the company announced today.
In total, 37 Albertson's stores in the Northern California region are closing, owing to poor profits and a recent sale of the company.
The 37 stores comprised 22 percent of the company's area stores, but only 12.4 percent of sales during the past year, company spokesperson Quyen Ha said.
"They've been unprofitable for several years now," she said.
Developer John Tze, of the Sand Hill Property Company, called the announcement about the Palo Alto store "good news."
"I think everybody wants that to go away," he said.
Sand Hill purchased 1.8-acres of the plaza earlier this year, although it does not own the portion with the 17,500-square-foot Albertson's. Tze is working with the owner of the Albertson's portion of the plaza, the Jones family, to revamp the entire center.
The developers have not released specific plans, but they held a neighborhood meeting in February to get input. They said the plans would likely include housing.
"It cannot a include grocery store," Tze said. "There's not enough room."
The center includes small retail shops that were originally designed by preeminent local architect Joseph Eichler. At the February meeting, residents expressed a desire for the new plan to include neighborhood-serving retail shops.
Albertson's has a lease with the Jones family through January 2008. Ha said it was too soon to tell what would happen with the lease. Tze expressed hope that the company would be interested in ending the lease early.
Councilman Jack Morton was disappointed to hear the news and hoped a specialty grocery store, like Trader Joe's, would move into the spot.
"It's too bad," he said. "Why would you want to lose another grocery store in our community?"
It's the second Albertson's to close in Palo Alto in recent years. The store closed its Alma Plaza location in south Palo Alto in 2004. The company had attempted to expand that store for years. For some, it became a poster child for the stagnant "Palo Alto process."
"The grocery industry in general is very competitive," Ha said, and the Edgewood store's small size was a handicap.
The store also had a reputation as being run-down. On one Internet bulletin board, one person called it "the worst major grocery store" he or she had ever visited.
The company also watched what happened at Alma Plaza, and learned lessons about the possibilities for expansion, Ha acknowledged.
The city had once attempted to use its nascent redevelopment agency to revamp Edgewood Plaza. After years of study, City Manager Frank Benest ended the effort, citing the lack of one property owner's participation and the city's reluctance to use eminent domain, among other factors.
Alberton's was recently put up for sale and purchased by three other companies. Cerberus Capital Management Group purchased the Northern California stores. (The remaining stores were bought by CVS and SuperValu.)
The sale closed Friday, Ha said.
The shuttering of the 37 stores will allow the company to invest in the remaining 131 stores in Northern California, according to a company press release. Alberton's employees, including the 35 working in Palo Alto, are unionized and will have the option of bumping other employees with less seniority, Ha said.
(Published on Palo Alto Online 6/6/06)