In the December 2012 Marina Times, Susan Dyer Reynolds wrote about “big-box” Equinox Fitness moving into the old Metro Theater on Union Street and compared it to the proposal from Pet Food Express to open their own big-box store on Lombard Street. The two projects are vastly different, but she got the big-box aspect right.
In 2009, Pet Food Express (PFE) sought Planning Department approval to open their 36th store in the recently vacated Blockbuster building on Lombard Street. They were so sure of their popularity that they signed a 10-year lease with two 5-year extension options without project approvals.
Subject to San Francisco’s formula retail regulations – voter-approved in 2006 – the Planning Commission denied PFE’s application based on residents’ and merchants’ strong opposition to a chain pet store in the Marina neighborhood commercial district.
Fast forward to 2013 and PFE is again attempting to open a store (now their 47th in the Bay Area) in what Ms. Reynolds referred to as that “boarded-up blight, the old Blockbuster building on Lombard.” Many neighbors concerned about conditions on Lombard Street have been led to believe that the Blockbuster building is unrentable and that Pet Food Express is the only interested party. The truth is that PFE has been the leaseholder on that “boarded-up blight” for the last three years.
Pet Food Express is the eighth largest pet goods retailer in the country and plans to grow to 100 stores in the Bay Area. It’s hard to deny that is big-box mentality. Tom Sinkovitz, a paid spokesman for PFE, says the company “isn’t Petco or PetSmart,” but the numbers say otherwise – there are currently only 42 Petco stores and 27 PetSmart stores in the same Bay Area region.
Proponents of PFE on Lombard, most of whom don’t live or shop in the neighborhood, tout the company’s donations to pet rescue groups as a reason to welcome them. In Pet Business, PFE’s Michael Levy revealed, “We don’t do the traditional advertising. Much of our new business comes from our pet rescue program.” PFE has a full-time communications manager to make sure their philanthropy is well known. You see that marketing at work in this very newspaper.
Philanthropy, no matter the goal, is a benefit to any community, and independent neighborhood stores share that philosophy. Local pet businesses donate time, money and products to local organizations, but the scale is necessarily smaller than a large chain, so you hear less about the efforts.
In addition, a greater percentage of revenue from an independent neighborhood retailer returns to the community it serves than from a chain store. Pet Food Express is headquartered in a 147,500-square-foot distribution facility in Oakland, so “locally owned” means East Bay, not San Francisco.
Products carried by PFE are already available from your neighborhood retailers, often at lower prices. However, PFE practices what is known as predatory retailing with a price-beating policy: “If the price of the item is $10 or less, we will beat it by 10 percent of the competitor’s price. If the price of the item is more than $10, we will beat it by $1.” So a small retailer who fairly prices their product with a lower markup than a chain store will still be undersold.
Because predatory pricing was one reason that PFE failed in their 2009 bid, they changed their policy on Nov. 1, 2012 for San Francisco only. They made a limited change to their corporate practice only to help open a store on Lombard, not to be a good neighborhood business.
There is a pattern here that PFE hopes you won’t recognize. They say they are not a big-box retailer yet maintain big-box practices, including hiring lobbyists and celebrities to endorse their cause. Do we reward Pet Food Express for coming back three years after the neighborhood spoke in such strong support of its small, local merchants? And after allowing their Lombard Street property to become a “boarded-up blight”?
The Marina Community Association met with PFE and polled their membership on the issue. Based on membership feedback, they will be opposing PFE on Lombard and have offered to help find a suitable tenant.
A chain store’s effect is felt far wider than the few blocks that surround it. Small business is an important part of the social and economic fabric of our community. We hope you will support the small businesses that have made our shopping streets so inviting, so interesting, and so successful in these tough economic times. If people want to shop at Pet Food Express, they already have three options in San Francisco – one at California and Presidio, just a mile from the Blockbuster building, and it has parking.