South Bay Grocers Struggle to Stay Open

After 14 years, Zanotto’s downtown San Jose market is finally closing its doors. By the end of the month, the local family chain plans to shutter the city-subsidized location, which has struggled since it opened in 1996.

Zanotto’s isn’t completely abandoning the downtown area. Troy Tibbles, the store’s manager, says they’ll soon ink a lease on a nearby spot formerly occupied by a pizza parlor and reopen there as a smaller deli operation on Aug. 1. Zanotto’s Express, as the new venture will be called, will serve up sandwiches, salads and sushi in a grab-and-go format.

“What we’re going to try and do is service the lunch clientele,” said Tibbles, who has been with the Zanotto’s family since 1984 and took over management of the downtown location in 2002.

Like Zanotto’s, other South Bay independent grocers have struggled to stay open as the economy tanked or bigger competitors, from specialty grocers to big box stores, moved in on what was once their turf. In February, valley institution Cosentino’s closed down after 63 years in the grocery business. Last year, PW Markets transitioned from grocer to real estate agency when they began leasing the buildings that once held their five San Jose stores.

Tibbles says his store has had to battle with inconvenient parking access, poor visibility in its mid-block location and a lack of downtown development. The 88, a stylish nearby condo tower, was supposed to bring in more shoppers, but it brought instead a jarring surprise: competition in the form of a Safeway’s “the Market” in a ground-floor retail space. “And we didn’t see that coming,” said Tibbles. “That was the straw that broke the camel’s back, if you will.”

With news of the Safeway store opening, Zanotto’s temporarily closed down to shrink its leased space from 22,000 square feet to 14,000 square feet, about the size of the Naglee Avenue location. The smaller space just wasn’t enough.

Lunch Counter

Other independent markets in the South Bay have had to adjust their game plan when a new, national chain set up shop.

Steve Pinney, general manager at Lunardi’s Los Gatos store, was working as a night clerk several years ago when Whole Foods Market announced a new store just on the other side of Blossom Hill Road.

“When we heard that they were going in, that’s what pushed us into getting organic foods and natural foods,” said Pinney, who’s been with Lunardi’s since 1987. “As a result we kind of built up a clientele for that before they even opened,” he said.

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