By JESSICA LONG
Anaheim-based Northgate Gonzalez Market, Orange County’s largest Hispanic grocer, has opened its first San Diego store at the site of a former Albertsons.
The store is the 22nd for Northgate, which has 10 OC stores and others in south Los Angeles.
“We’ve been looking in San Diego for a number of years,” said Oscar Gonzalez, chief operating officer of Northgate, which is owned and run by the Gonzalez family. “The reality is that the opportunity came at this time. But we were ready to come quite a while ago.”
Former Albertsons
The company’s 60,000-square-foot store opened late last month in southeastern San Diego, just north of National City. The store used to be an Albertsons, which closed in September.
Boise, Idaho-based Albertsons LLC shuttered the store as part of a restructuring after the supermarket strike of 2003 and early 2004.
Last month, a group of buyers, including Minneapolis-based supermarket chain Supervalu Inc., acquired Albertsons. Supervalu plans to keep Albertsons’ Southern California stores. Others in Northern California and elsewhere are set to close.
Northgate says it could look at other Albertsons stores that end up closing. Whether the company would go as far as Northern California isn’t clear.
OC Stores
In 2004, Northgate took over an Anaheim store that used to be run by Fullerton-based La Rioja Ranch Markets, which went out of business.
In the past year or so, Northgate took over a Santa Ana store run by a smaller Hispanic grocer.
Even before the sale of Albertsons, the grocer was closing Southern California stores. Earlier this year, Albertsons said it was closing stores in Fullerton and Stanton.
Northgate “should expand as quickly as they can without betting the ranch,” said Loyd Greif, chief executive of Los Angeles-based investment bank Greif & Co. “If there’s an Albertsons location that looks good to you, you should buy it before someone else does. A land grab such as this seldom happens. There’s no telling when it might come up again.”
Northgate spent $10 million to buy and renovate the Albertsons in San Diego’s Southcrest, a predominantly Hispanic part of the city.
About 250 people work at the store, according to Gonzalez.
Gonzalez’s late father, Miguel Gonzalez Sr., started Northgate, which now is run by his 13 children. All but one of the siblings works for the company. They meet each Wednesday over lunch to plot Northgate’s strategy.
History
Northgate got its start in Anaheim in 1980, when Miguel Gonzalez bought a small store on Anaheim Boulevard. He didn’t have money to change the sign, so he took on the Northgate name.
Northgate has estimated yearly sales of about $300 million and is the county’s largest Hispanic-owned business, according to the Business Journal’s annual list of minority-owned businesses. The grocer employs about 3,500 people, the bulk of them in OC.
Northgate, which has name recognition among OC Hispanics, will have to build a following in San Diego.
The company is set to compete with mainstream grocers, including Kroger Co.’s Food 4 Less, as well as Hispanic markets, including those of Escondido-based El Tigre Inc.
Gonzalez said he hopes to do that with an attractive store and specialty products.
Northgate’s stores are similar to other supermarkets but with a strong Hispanic flavor. They include bakeries, meat counters, products from Mexico and money transfer services.
More San Diego Stores
Carl Middleton, Northgate’s vice president of real estate, helped scout out the chain’s San Diego store and said he is in the process of searching for more.
“We see San Diego as a large and relatively untapped market,” Middleton said. “We would like to open one to three a year if the right opportunities presented themselves.”
Northgate looks more for underserved neighborhoods than demographics, Middleton said.
“We try to appeal to our neighborhood,” Middleton said. “We want to be the best neighborhood grocer we can without alienating the Latino population.”
Northgate plans to keep expanding in OC and Los Angeles County, Middleton said.
Long is a staff writer with the San Diego Business Journal.
