We often hear that corporate food chains are enormous because it makes them more efficient. How true is this? In an age where Americans increasingly buy groceries with pay-later plans, food-chain workers barely make ends meet, and executives get richer, where is the efficiency?
In California, Albertsons Companies maintains nearly 600 stores across the state, over 100 more stores than Costco and Walmart combined, making it the top dog. If the idea of Albertsons’ dominance is foreign to you, be aware that grocery chains like Safeway, Vons, Pavilions and more than a dozen others are all owned by Albertsons Companies. As Albertsons has gotten larger and more powerful, its growth has backfired on California communities.
Corporate consolidation has steadily increased over the past 40 years, pushing small independent businesses into the minority and consolidated grocers into dominance. As Albertsons protects its profits and gears up to close a handful of California locations — which would lower its operating costs — communities might not get a chance to see these grocery stores replaced. In addition to “lease squatting” uncovered by SFGATE’s investigation on “zombie stores,” companies like Albertsons can maintain their power by blocking competitors through the use of grocery restrictive covenants: stipulations written into deed and lease agreements that limit or completely prohibit the operation of a grocery store on a piece of property. As they sell a property, they write the restriction into the deed so the next owner is unable to lease the space to a grocer. This practice effectively obstructs a community’s access to food and limits its autonomy. However, finding out whether a piece of land is impacted by a grocery-restrictive covenant is tricky; restrictive covenants on retail properties are often not publicly accessible in California. Once communities realize what is happening, they’re furious and often organize to fight back.
The Shame on Safeway campaign, launched by the Food Empowerment Project, protested a restrictive covenant that Safeway placed on one of its prior locations in Vallejo, effectively banning a competitor grocer from operating in that building for 15 years. Entire childhoods went by without families having a nearby grocery store. After sending several letters to its parent company, Albertsons, about how the restrictive covenant was harming the community, the Food Empowerment Project received nothing substantial in response, other than this practice is “sometimes necessary.”
Different town, different year, and the same playbook is being used. David Renkert, a brewery owner and the lead organizer of Friends of Tahoe City, was looking to buy an old Safeway building in Tahoe City. During negotiations, he was asked by Albertsons, which you’ll recall is the parent company of Safeway, if he would agree to a grocery-restrictive covenant on the property. Renkert did the math. The building had the freezers, fridges and piping required for a grocery store. Blocking another grocer from operating in a grocery building would severely lower the economic opportunity of the space, diminishing the property’s value. He ultimately did not purchase the building, and Albertsons ceased communications with him.
After learning of Albertsons’ similar behavior in towns like Bishop and Bellingham, Washington, Renkert began organizing his community through Friends of Tahoe City, which allowed him to push back against what he saw as Albertsons’ obstruction of food access. Due to the town’s remaining Safeway being “constantly running out of fresh produce and other food,” he told me, he saw “residents have to drive out of town, sometimes an hour to get what they need.”
Why does a company like Albertsons write these grocery-restrictive covenants? Only a business with extensive market power benefits from these kinds of restrictions. By closing stores and strategically funneling consumers to other branches, giant grocers can hike up prices, serve low-quality foods, block competitors from operating at prior locations, and pay their workers lower wages. Blocking and maintaining control over competition gives large grocers more price-setting power. This power is taken from the consumer, limiting their choice of where to shop.
It’s not just Tahoe City and Vallejo that have been dealing with this; towns like Chula Vista and Eureka have also stood at the mercy of Albertsons’ power. But legislators have taken note. While current federal antitrust law falls short in meeting the needs of our current and evolving economy, here in California, Assembly Bill 1857 — authored by Assemblymember Cecilia Aguiar-Curry — aims to prohibit and nullify grocery restrictions that create food deserts. Assembly Bill 1776, or the Compete Act, would also begin to address Albertsons’ power over communities by updating California law to include single firms as unlawful actors when engaging in manipulative and anti-competitive behavior. Lawmakers passed both of these bills this session, and the bills await their fate in the governor’s office.
The front-line fight for dignified food access is alive and well, but it’s not over until we reckon with the true role that corporate grocers play in food access.
Angelica Sanabria is the narrative and network coordinator at the California Food and Farming Network.