Potrero Hill gets Whole Foods 

Within the next year, high-end grocery chain Whole Foods will be moving to Potrero Hill, creating its third San Francisco store in the backyard of several local and regional food markets. But staff members from the stores likeliest to be affected said they are ready to compete with the 192-store Whole Foods Market Inc. (WFMI).

Lambert Development LLC is building the 46,000-square-foot store as part of its "The Potrero" mixed-use project at 451 Kansas St., which will also have 162 condominium units, project representative Alan Mark of the Mark Co. said. The condos, which began pre-sale this week, are a mix of studio to two-bedroom flats and two- to three-bedroom townhouses. Some 20 of them are priced below market rate and the rest priced between $400,000 and $1 million. The condos and the Whole Foods are scheduled to open this summer. Whole Foods will have 100 dedicated parking places.

"A lot of people want an old neighborhood, an established neighborhood … plus Whole Foods. Everybody wants a Whole Foods under their building," Mark said.

The site was formerly an S&C Ford repair facility, and was marked for an office development that never received approval, Mark said.

Potrero Hill sports mostly small, neighborhood-serving businesses, among them the Good Life Grocery, a two-store chain with a second location on Bernal Hill. Launched in 1974,the Potrero location is the older and smaller of the two, but has built a name for itself as a purveyor of high-end produce, meats and natural products — the same types of things marketed at Whole Foods.

Several customers, particularly those online, have lamented that the new arrival may worsen business substantially. But Good Life President Lester Zeidman said he still sees opportunity, though he expects sales to dip initially after Whole Foods opens this summer. He recently upgraded his store’s refrigeration, widened the aisles and began bringing in new products.

"We believe right now that people are shopping at multiple locations. We’re not their single source," Zeidman said. "We believe that will continue. I’m sure they’ll succeed, but I think we’ll succeed as well. We’re a neighborhood serving business, and we’re employee owned."

The larger Rainbow Grocery Cooperative just over one mile from the Whole Foods site also caters to customers interested in healthy and eco-friendly foods, and like Whole Foods is a drive-to, major-shopping destination. It lacks both meat products for humans (it stocks meat pet foods) and a deli counter, but staff members feel confident for its future.

"It’s definitely another natural-foods business in the area. There’s plenty of business to go around," said spokeswoman Joolie Geldner, one of the store’s 200 staff-owners. "We tend to try to have some hard-to-find items. We also like to bring in new companies and companies that are just starting out, especially in the Bay Area. We also make a point to have a lower markup on our staple items."

Safeway Stores Inc. (SWY) has a supermarket at 16th Street. The firm caters to a different market, and is "absolutely confident that our offerings … along with our customer service can excel and surpass any other grocer," spokeswoman Jennifer Webber said.

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