OAKDALE -- A grocery store opens today, creating 38 jobs and generating competition for the shopping center's existing market.
Grocery Outlet Bargain Market invested more than $1.5 million to convert a former furniture showroom into a discount food store on the 800 block of Yosemite Avenue.
About a hundred yards across the parking lot is Cost Less Food Co., which has anchored that center since taking over the New Deal Market in 2000.
Grocery Outlet and Cost Less both target value-oriented shoppers and they are known for getting special buys that allow products to be sold at deeply discounted prices compared with traditional full-service grocers.
Cost Less apparently didn't have a guarantee in its commercial property lease to prevent another grocer from moving into its center.
"There was no restriction saying we couldn't do it, and we're in the business of leasing space," explained Andrew South, whose Portland property management company oversees the Oakdale shopping center.
Cost Less officials won't comment on the new competitor, but concerns about how the older store will fare have been gossiped about for months by Oakdale shoppers.
"I would not be happy if I were Cost Less. At the very least, it's going to get its customers cut in half," speculated Tom Solomon, co-owner of CoSol Commercial Real Estate in Modesto.
Solomon, who specializes in retail leasing, said it's very rare for a retailer to not have protections written into its lease. "Grocery stores always have exclusivity language saying there cannot be other grocers in the same center," he said. "I would call this an oddity."
Grocery Outlet's owners are not concerned about competing with Cost Less. "I think we're going to complement each other. We have different items than Cost Less," said Kathy La Force, who owns the Grocery Outlet franchise in Oakdale with her husband, Carl La Force.
Grocery Outlet will stock about 5,000 products in its 16,520-square-foot store. Compare that with a typical Save Mart Supermarket, which stocks 50,000 to 60,000 products in stores that often have more than 50,000 square feet.
The Oakdale Cost Less has 25,000 square feet and carries all the basic groceries. It is one of five Cost Less markets in Stanislaus County, and the privately owned chain has its corporate headquarters in Ceres.
Rather than stocking every grocery item every day, Grocery Outlet carries a constantly shifting product selection, including discontinued brand-name items.
"We carry lots of health and beauty products at deep discounts," said Melissa Porter, Grocery Outlet's corporate vice president of marketing.
The chain's headquarters is in Berkeley, and it has 175 stores, including two in Modesto.
"We coexist fairly well with other groceries," Porter said. "Customers basically bargain shop at our store, then they'll go to a conventional market to fill in what they need."
But Grocery Outlet and Cost Less will compete head-to-head selling produce and meats.
Judging by the two stores' currently advertised specials, shoppers may find better bargains at Cost Less.
Grocery Outlet, for example, is advertising frozen boneless, skinless chicken breasts for $1.66 per pound, while Cost Less is advertising fresh boneless, skinless chicken breasts for $1.35 per pound.
Seedless red grapes at Cost Less are 68 cents per pound, while 2-pound bags of the same cost $2.99 at Grocery Outlet.
Shoppers will get to do their own comparisons starting today. The new store will have a "soft opening" at 8 a.m. The grand opening will be Saturday.
Bee staff writer J.N. Sbranti can be reached at jnsbranti@modbee.com or (209) 578-2196.
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