Irony: Expanded Starbucks in Safeway opens, Industrialists closes

New Starbucks inside Safeway (photo: Castro Biscuit)

New Starbucks inside Safeway (photo: Castro Biscuit)

Old Safeway Starbucks kiosk getting demo'd (photo: Castro Biscuit)

Old Safeway Starbucks kiosk getting demo’d (photo: Castro Biscuit)

Well this was interestingly timed… Safeway’s newly expanded Starbucks located near the front of the store has just opened for business. Meanwhile, yesterday afternoon, moving vans hauled away what was left of the Industrialists’ inventory after a fire sale the past few days that saw many of their items marked down 90%. The Industrialists’ space (2201 Market Street) at the corner of Market and Sanchez was hoped by some to be the site of a new Starbucks location for the Castro. Due to many neighborhood association, merchants, and resident protests, and not fitting the new formula retail rules, Starbucks was denied their conditional use permit for the location.

The new Starbucks is front and center in the Safeway and features a sitting area off to the side. The grocery store’s regular cafe seating area has been torn apart. No one at the store we spoke to was sure of what would be happening to it moving forward.

Former Industrialist's Space (photo: Castro Biscuit)

Former Industrialists space (photo: Castro Biscuit)

As far as the future of the Industrialists’ space goes, we sent them an email to get more information about their closing. Perhaps the property owner is renovating the building (and the defunct, dilapidated parking area surrounded by a chain link fence) and we’ll see a return of the metal furniture store?

We’ll let you know what we hear back.

Roy McKenzie

Roy has been a Castro resident since 2010 and is passionate about drag queens, bicycling, and food. Follow his babbling on Twitter.

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22 Responses

  1. Shane says:

    It seems as if the entire store is receiving a facelift. New shelving has gone up in the wine section along with new lighting and signage. I’m digging the new location of the Starbucks as the windows above it bring in a great deal of natural light.

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    • sfjohn says:

      I asked one of the clerks & she said that Safeway is running scared because of the new Whole Foods going in across Market

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  2. rblack says:

    /facepalm

    Well I’m glad we protected this independent business from the evil Starbucks.

    Guess a lot of the people who signed Mogg’s anti Starbucks petition liked the idea of the Industrialists, but not enough of of them actually shopped there and supported them.

    Fingers crossed it is just for a renovation, but doubtful since they tried to get rid of all their inventory.

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    • Ferrin says:

      I talked to a merchant who attempted to lease the space, and he told me that the owner is definitely looking for a new company to lease it, and that the asking amount is absolutely crazy. None of that comes as a surprise to me.

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  3. wendy mogg says:

    Industrialists was asked to leave by landlord. Many speculations floating about his plans for the space….nothing verifiable, though.

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  4. Stephen says:

    The building is in terrible shape and I think there are some structural issues. That is why the parking are where the zipcars were is fenced off. The City deemed it a hazard. Personally , I think the whole thing should be torn down and build housing (preferably affordable0

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  5. Matthew says:

    Now if the Market Street Safeway can get rid of the homeless camps outside the store, I may shop there again.

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  6. John says:

    Safeway’s facelift is happening to prep them for Whole Foods opening across the street. Wondering how long the Industrialists space will remain an empty eyesore/graffiti magnet/hazardous space. All of which, of course, are much preferable to a Starbucks.

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  7. Safeway’s seating space w/free wifi was a filthy eyesore: dirty tables rarely cleaned, hobos wandering around and sometimes seated there. Very unsafe space where your laptop, tablet or cell phone could easily be stolen. In fact, that particular Safeway has always been unclean and inhospitable…even in spite of their “renovation” a few years back. Whereas some other Safeways have been upgraded into welcoming, clean, inviting spaces. My favorite is the one at Portrero and 16th. Yet, in a much worse neighborhood than the Castro. Don’t we deserve better?

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  8. I usually avoid this Safeway, they have the same problem most of the Safeways in SF have, but it’s even worse here. LONG LINES. Every time I go here I wait 10 – 15 minutes in the check out line. It’s been like that for at least 10 years. It’s worse later at night where there can be lines of up to 12 people waiting and only one register open. If they are concerned about Whole Foods going in across the street, they need to spend more money and energy on customer service. New shelves and pretty displays are like putting lipstick on a pig.

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  9. I can’t say I’m sad to see Industrialist go. Those guys have been doing the same thing in other spaces for years. They usually rented temporary spaces and left just as quick. I always got a kind of fly by night feel for them. They did the same with this space, except that temporary turned out to last longer than usual. And their business model was ridiculous to me. They go to out of business restaurant spaces and buy old restaurant furnishing for pennies on the dollar. It used to be exclusively stainless steel kitchen furniture and some medical furniture. The stuff they buy was too beat up to resell to restaurants. Then they buff it out so it’s nice and shiny and sell it retail for enormous prices. When they opened this space they began to buy more tableware and glassware from many of the same sources. or Eastern Europe. The prices they sold this stuff was ridiculously high, they were marking a lot of it up close to 1000%. I bet that their fire sales pricing still netted them a profit of 200% on that stuff. No one got a good deal from those guys!

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  10. AC94114 says:

    This is another instance where I don’t understand all these zoning laws/formula retail rules: why the hell do they even need a Starbucks *inside* of Safeway…when there is (literally) one RIGHT NEXT DOOR!?!? If they were so wanting to open another location, maybe they should have closed one of the two in the Safeway plaza & then opened another location.

    Also: I am guessing there will be ANOTHER Starbucks location opening inside Whole Foods.

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    • rblack says:

      They don’t open SB inside WF do they?

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      • AC94114 says:

        Not sure if they do in SF, but I have been to one that had a Starbucks in it. (I was sort of being a smart @ss with that comment…) ;-)

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    • Stephen says:

      Starbuck’s wouldn’t have gone to the expense of expanding inside of Safeway if they intended to open in WF as well. I am sure there is also a non-compete contractual agreement between SW and SB pertaining to SW’s competition.

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  11. Ferrin says:

    Just to respond to an earlier question with an answer that may not be popular, but is definitely based in some historical fact: Why does Starbucks “need” a supermarket store next to its company-owned store? They don’t, obviously, but maybe this will help understand their (evil) reasoning.

    When I moved to New York City at 18, I transferred Starbucks locations from North Carolina to one in a building owned by Cooper Union at St. Mark’s Place. From the front door, you could see a Starbucks across the street at Astor Place, and another one at the Barnes & Noble a bit beyond. Not visible, but a block or two away was another at 2nd Avenue & 9th Street.

    Consider this: When you’re a company that has the money to aggressively muscle into a city like New York or San Francisco, you can create such a level of saturation that forces smaller competition OUT. Some number of years go by, you’re at over-saturation, and you have the ability to close less busy stores, but in many ways, you’ve already won the game. What’s probably going to replace you is much less likely to be in direct competition with you. Two of those four Starbucks are now closed, but are they replaced with new coffee shops? No.

    Now to ADD to that, Starbucks-owned stores and Starbucks licensed partners (read: the Safeway stores, airport stores, most mall stores, etc.) are COMPLETELY different divisions of the company. Consider NBC News and NBC Entertainment, two divisions of one company that are clashing over the latter’s planned Hillary Clinton film. That may be a bit of a stretch, but my point is that they really aren’t divisions that need to consult with each other in any way.

    Put yourself in the shoes of Starbucks, Inc., as it relates to these two divisions. You need to satisfy your grocery partners to insure you keep them from going with another coffee license (and they will definitely want one as part of their own “shopping experience” plans), but you can squeeze more profit out of a company-owned store in that same high-traffic area. You get profit out of both locations, ensure your grocery partner stays with you throughout their chain presence, and assert your brand dominance. Safeway, in turn, gets that “one-stop shop” experience, and only really need to make a mild profit from the location since it’s not really MADE to be their big profit turner.

    (My guess is that Starbucks also helped fund some of Safeway’s renovations in order to snag that bigger presence in the redesign, but that’s just a guess.)

    Hope that helps to illuminate the issue a little. Understand that I hate this as much as anyone else, but it’s actually not as dumb a business concept as some people assume.

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