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Did you know that grocery chains could block other groceries from moving into sold property?

Climber

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Jul 13, 2004
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Brett
How big grocers have been limiting food access in California
Corporate consolidation has steadily increased over the past 40 years, pushing small independent businesses into the minority and consolidated grocers into dominance. As Albertsons protects its profits and gears up to close a handful of California locations — which would lower its operating costs — communities might not get a chance to see these grocery stores replaced. In addition to “lease squatting” uncovered by SFGATE’s investigation on “zombie stores,” companies like Albertsons can maintain their power by blocking competitors through the use of grocery restrictive covenants: stipulations written into deed and lease agreements that limit or completely prohibit the operation of a grocery store on a piece of property. As they sell a property, they write the restriction into the deed so the next owner is unable to lease the space to a grocer. This practice effectively obstructs a community’s access to food and limits its autonomy. However, finding out whether a piece of land is impacted by a grocery-restrictive covenant is tricky; restrictive covenants on retail properties are often not publicly accessible in California. Once communities realize what is happening, they’re furious and often organize to fight back.
This was new to me.

This grocery chain sucks ass for doing this.
 
Lots of different types of companies do this.
Auto parts chains have been writing these types of restrictions in, when the stop leasing a property or sell a location,
so a competitor won't come in behind them, to an already known address.
It's more prevalent than you might think.
 
Well this doesn't surprise me.

Back when Albertsons merged with Vons, or local Vons store was across the street from the local Albertsons store.

Part of the deal for the merger was that they had to sell some of their now excess properties.

A small chain, from I think Washington, called Haggens (I think) bought up the redundant Vons stores.

And that whole thing went very badly. We were Vons shoppers, and we stayed at Haggens, but, yea it was quite a different store, the prices were higher, etc.

I honestly don't know how something like Haggens thought they could pull this off from being a small local chain in the PNW to a significant footprint in Southern California. They got, like, 40 properties -- all at once.

The whole thing quickly fell apart, and, somehow, someway, Albertsons got all of the properties back.

Our local one basically sat empty. For almost 10 years. The rumor was they were holding the lease to keep Aldi from moving in.

A local bowling alley got sold, and turned into an OSH hardware store. That was sold, and Aldi moved into that.

Now that empty space is a Ranch 99 market.
 
Why does Trader Joe's always seem to have the smallest parking lots?!
The TJ's in Stockton has a huge parking lot, Strip mall and a Safeway on one side. But the two TJ's San Antonio TX are postage stamp parking lots. :dunno
 
I watched the changes of Albertsons/Safeway merger in Lake Havasu and Paso Robles.

Havasu, sold the Albertsons, and kept Safeway, Safeway had the best location, Albertsons was upscale from Safeway.
Another grocery chain bought the old Alb. didn't make profit and closed. Building remained vacant for a year or so,
came back as a more upscale Albertsons, to this day.

Paso Robles kept the Albertsons, and sold the Vons, upscale Safeway, Every year @ Thanksgiving, Albertsons parking lot fills up completely. This still happens, The Vons replacement is struggling, but still open, Albertsons, lost in Paso, only one full parking lot.
 
The original Safeway in Santa Rosa closed as they built a larger one nearby.

This was many years ago and it remains a busy Grocery Outlet to this day.
 
Happened to be in cotati the other day and was pleased to see Oliver's is still there
 
Those types of covenants should be eliminated.

I mean, the ones that say you can't sell to Chinese or Negroes should be eliminated too, but that shit literally is still on musty old books in many areas.

Our laws in general are a clusterfuck of unmanaged psychosis over a century old.
 
Was reading up about it, apparently when these companies deed over properties with these exclusions, it dramatically lowers the property value (by like 30-50%) so they eat losses on the sale. Some municipalities have then used eminent domain to force purchase of the property, they value it at the reduced value, and then strip all the exclusions off the deed!

at any rate, it seems there is a passed bill sitting on Newsome's desk right now (1857), waiting his signature, which would mostly ban this nonsense.
 
Deed restrictions aren't lease restrictions. Go dark clauses are the norm as are "exclusivity of sector" in commercial leases. "Lease squaring" isn't a real thing in a center with a GD clause.

Pretty much the quality I expect from SF Gate.
 
Deed restrictions aren't lease restrictions. Go dark clauses are the norm as are "exclusivity of sector" in commercial leases. "Lease squaring" isn't a real thing in a center with a GD clause.

Pretty much the quality I expect from SF Gate.
Say what one more time

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