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End of the Independent Grocer?

by George Ringwald

BUSINESS was good," mused Bill McKenzie, manager of Food Mart's Eureka store, "up until Waremart came in. They took a chunk out of us, and then Safeway got more aggressive."

So it didn't come as a complete shock when in late August the 75 or so employees of Food Mart's two stores in Eureka's Henderson Center and on McKinleyville's City Center Road learned from acting President Peter Vellutini Jr. that the company with an approximate 50-year history in Humboldt County was being taken over by Safeway.

The rumor mill was abuzz for a year or more and veteran employees could well have seen the handwriting on the wall as long as nine years ago. That's when Food Mart's employees elected to drop out of the Retail Clerks Union. It wasn't much of a choice really they could vote to keep either their jobs or their union pay.

As McKenzie remembers: "It was getting hard for independents to pay union wages."

He adds: "Independent markets are gradually going out of business. The big corporations are taking over. They buy by the truckloads; we buy by the cases."

It's a familiar story in America today as newspapers, banks and booksellers as well as grocery stores find themselves forced to surrender their independence to corporate big money. Humboldt County which in the past decade has gotten a Waremart, Costco and Staples, and not far down the pike may also get a Wal-Mart is obviously no exception.

"The big discount stores are getting a strong foothold in the area," notes Jim Gupton, a Eureka native who has been "bouncing around," as he puts it, in the grocery business for 41 of his 57 years. In fact he started with Safeway when its Eureka store was at Fifth and I streets.

Now, when he isn't busy with the Eureka City Council duties he took on two years ago, Gupton works on marketing and advertising for Murphy's Markets.

"We really don't get into titles here," he shrugs when asked what his is. Indeed, Gupton, a burly, bearded, amiable fellow, is pitching in at unloading crates of fresh corn from a pickup at the Murphy's store in Cutten (one of five) when I meet him.

Of the imminent demise of the Eureka Food Mart store, Gupton says: "That's going to leave a void. It's the end of a landmark institution that will be sorely missed."

Certainly, that's the way Food Mart employees see it. It was family with both fellow workers and customers.

"I don't think this will be a grocery store again," said McKenzie, who started out as a produce clerk in 1969 and worked his way up to manager, the job he's held for more than 20 years. "I'm really going to miss the people here."

It will be equally sad for folks in the Henderson Center neighborhood. "There are a lot of houses around here, and a lot of elderly people walk to the store." McKenzie, who is 54, then anticipates my next question by saying, "I have no idea what I'm going to do."

Vickie Benoit, a young woman whose engaging smile at the checkout stand made her a favorite with many customers, said: "Very sad that's my first feeling. I'll miss the family of co-workers and customers."

She put in 22 years with Food Mart and has a special niche in her heart and memory for Peter Vellutini Sr., who died at the age of 71, less than three weeks before news of the sale broke in newspapers here.

"Pete was very good to me," she said. "I had a lot of tragedy a year ago, lost my husband, and he (Pete Sr.) worked hours for me so I could be with my kids. So this has been a rough year for me kind of a double whammy."

On the bright side, though, she knows where she's going from here to work in Safeway's second Eureka store, at 2520 Harris.

Jim Dimauro, manager for the past year and a half of Safeway's main Eureka store, at 930 W. Harris, said Safeway has been interviewing Food Mart employees. "We're trying to hire as many as we can. McKinleyville will probably hire the most."

The consensus is that Safeway will close down its own McKinleyville store presumably with the assurance that another competing grocery won't open up there and then move into the McKinleyville Food Mart. It makes sense. Food Mart has been in McKinleyville since 1960, and two years ago reopened with an expanded and modernized operation built around the old building. It has a sparkling clean look to it, with new fixtures, and has about twice the square footage of the McKinleyville Safeway store.

Food Mart leases the McKinleyville parcel, while it owns the land its store in Eureka sits on.

Dimauro says of the Safeway takeover of Food Mart: "I don't think they (Safeway) actively pursued this. Safeway is looking to expand, but they're looking at larger chains." That suggests that the key to the deal was the attractive, spacious McKinleyville Food Mart store.

Pete Vellutini Jr. says the decision to sell Food Mart was his father's. He told the Journal that he raised no objection to it. Who approached whom initially is murky, but Gupton, who considered the elder Vellutini "a very good friend," said, "I'm sure the offer Safeway made was one that he couldn't refuse." (The family has declined to disclose the sale price.)

With the sale another Vellutini will also be ousted from the business Pete Jr.'s sister Vicki Botkin is a Food Mart corporate officer, although she does not get involved in day-to-day business.

At 38, Vellutini Jr. said he doesn't know what he will do next. "I really haven't given it that much thought. Between Dad's passing and the selling of the store, that's pretty far down on my list at the moment. I don't know if I'll go into some other food store or into another business."

But he can't open another grocery store the deal with Safeway includes a clause that prohibits him from competing with the chain.

With the deal not yet sealed, Vellutini has time to contemplate his future.

"It won't be (completed) for another week or 10 days," said Food Mart attorney Francis B. Mathews of the deal. "The final papers are not in yet."

One thing that's clear is that this transaction raises questions about Eureka's future.

Gupton believes that, "There's still a need for the old fashioned way of grocery shopping," which is why he doesn't worry about any takeover attempt of Murphy's Markets. "Not in the immediate future," he adds. Safeway stores, he notes, have square footage in the 40,000 to 50,000 square foot range, and Murphy's Markets are in the 15,000 to 20,000 range.

However, market surveys show consumer tastes are changing.

"The trend across the country seems to be going to destination hubs. And it looks like there's that possibility on the outside here. The question is: Is that what we want? That's my question," he said.

By destination shopping hubs, Gupton was referring to a city that will serve an area within a 150-mile radius. As examples he cited Redding, Medford, Ore., and even Rohnert Park, once considered a suburb of

Santa Rosa. But today, he says, all the so-called Big Box stores the
Target, Home Depot and Wal-Mart variety are in Rohnert Park instead of Santa Rosa.

And is that what Eureka has to look forward to, down the road, say 10 years from now?

"Unfortunately, yes," was Gupton's reply.


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