Sonoma County’s G&G Supermarkets purchased by Safeway

G&G Supermarkets, a landmark family-owned Sonoma County grocery business for over a half century, has been purchased by Safeway stores, the two companies said Thursday.

Pleasanton-based Safeway has agreed to hire all 250 G&G employees from the company’s Santa Rosa and Petaluma stores at “the same compensation or better,” said G&G CEO Teejay Lowe.

The exact date for the change in business has yet to be announced, but the deal should be completed by the end of the year, Lowe said. Each store will be renamed Safeway.

G&G workers at both locations learned of the sale Thursday morning in meetings with Safeway and company officials.

Terms of the sale were not disclosed.

Safeway officials did not respond to questions about the impact of the purchase on their existing stores near the G&G properties, including the Safeway on Marlow Road in Santa Rosa and the store on South McDowell Boulevard in Petaluma.

“We are very excited about this opportunity and look forward to bringing these locations into the Northern California Safeway family,” Safeway said in a statement confirming the sale.

The two companies “are working together to ensure a smooth transition for store employees and customers,” Safeway said in the statement. “Each store will be closed for a short period of time once the transaction closes, which we anticipate will be sometime in December.”

A sale of the G&G markets had been rumored in recent months as empty space appeared on shelves and longtime patrons openly questioned checkers about a possible closure.

Lowe insisted “business has been strong” and suggested the sale’s timing was partly related to the age of the company’s four owners, all members of the Gong family, including his father, Robert Gong, and his three uncles. The four owners range from 65 to 83 years old.

“It’s a good time for them to retire,” Lowe said. “They’ve been serving Sonoma County for 53 years. It’s a good time for them to enjoy the holidays.”

Of the sale, he added, “It was a decision that the entire family supports.”

The agreement also will benefit current employees, Lowe maintained, not only by preserving their compensation but also by offering them new opportunities with a larger grocery company.

“This deal checked all boxes,” he said.

G&G was founded in 1963 by Robert Gong and his late father-in-law, Gee Kai Gong. The company operates a 96,000-square-foot supermarket on West College Avenue and a 55,000-square-foot store on Sonoma Mountain Parkway in east Petaluma.

Safeway is owned by Albertsons Companies Inc. of Boise, Idaho, one of the largest food and drug retailers in the United States.

In Sonoma County, G&G has been the epitome of a family-operated company. At one point, close to ?25 relatives worked for G&G, Lowe said. Even today he works with six family members who are either siblings or cousins.

Marcus Benedetti, president/CEO of Petaluma-based Clover Stornetta Farms, said one distinction about G&G was that for years; the Gong family members would gather together for lunch each day at the Santa Rosa store. Another was that the store’s male workers for decades wore ties and one owner, upon meeting Benedetti, then a teenager, wanted to know why the young man wasn’t wearing one when delivering milk to the store.

G&G proved itself a successful business, he said, and in the 1980s and early 1990s “moved more merchandise than any other retailer I’m aware of” for a single store.

Benedetti called Safeway “a great operator” for a chain, but he added that the community nonetheless was losing an icon.

“It’s not the same as having an independent, multi-generational family operating those stores,” he said.

Both employees and shoppers Thursday voiced the notion that an era was ending.

“To me it’s just a sad day that we’re losing G&G,” said bakery manager Jim Caperton, who was hired by Robert Gong in 1999. He said he plans to work for Safeway and hopes his new employer will allow the store to keep producing some of its signature items, including pork buns and Peking duck.

The sadness also was felt by 17-year store veteran Johnny Velasquez, but he added, “I’m glad I was here to the very end.”

Velasquez, the head of the grocery department, said it mattered that G&G’s owners had won Safeway’s agreement to hire all of both stores’ employees.

“It’s great that that was worked into the deal and that they were thinking of us,” he said.

On Thursday morning, shopper Rose Lombella learned of the sale personally from Santa Rosa store director and Gong family member Carol Lowe-Drake, a fitting touch for someone who had patronized G&G at three different sites for over half a century.

“This is clean and convenient and friendly,” the west Santa Rosa resident said while standing beside her grocery cart.

Like others, Lombella had thought the store shelves in recent weeks looked “a little emptier” and she had heard rumors of a coming change in the business.

“It’s going to be a little sad,” she said. When the store becomes a Safeway, she likely will buy some items there but might end up doing most of her shopping at Raley’s on Fulton Road.

G&G has long been the place that crab lovers turned to each November, with many calling the store to learn when the first Dungeness catch of the season would be arriving from the docks of Bodega Bay. After talking with fish processors, Lowe said he’s looking forward to “the last and most incredible start” of a crab season for the grocery company next month.

In the community, G&G built a reputation for generous support, especially for turning out as a family to buy champion lambs raised by 4-H and FFA students at the Sonoma County Fair’s junior livestock auction. The company supported a variety of high school fundraisers, particularly at Cardinal Newman and Piner high schools.

More recently, it was the first retailer to sell Noble Spoon specialty meals produced by the Sonoma County Council on Aging. And when Lake County residents were displaced by wildfires, G&G donated store gift certificates to the relief efforts, said Brett Martinez, CEO and president of Santa Rosa-based Redwood Credit Union.

“They’ve always been that company that has been there,” Martinez said.

Observers said the motivation behind Safeway’s purchase seems to center primarily on the value of the two G&G store sites.

When a grocery chain buys an independent retailer and operates it under the original name, then the buyer is principally seeking the chance to run a separate and more entrepreneurial business, said Larry Brucia, president of Sutti Associates, a Burlingame general contractor that helps supermarket companies design and build stores.

But in this case, “Safeway is purchasing the store for its location,” said Brucia, who oversaw the construction of the Oliver’s store in Windsor.

Stores are a valuable commodity here because they are expensive to build and so few good sites remain for new supermarkets in the county.

Tom Scott, the retired CEO of Cotati-based Oliver’s Markets, said realistically only two potential grocery store locations remain in the county directly off Highway 101, one in Cotati and one in north Windsor. And Safeway officials have a reputation for being on the lookout for new store locations.

“They’ve tied up the best corners in Northern California,” Scott said.

Safeway will take over the leases of the two G&G stores. The Santa Rosa property is owned and leased by a company that members of the Gong family have a stake in, Lowe said.

On Thursday, Lowe declined to say whether he had been offered a position under the new ownership.

“Whatever the future holds, I will be a part of this community,” he said.

The purchase is the second acquisition this year of an independent grocer in the county. In February, Nugget Markets, an upscale family-owned company headquartered in Woodland, announced it was purchasing Sonoma Market and Glen Ellen Market.

The G&G deal comes at a time when Safeway and other supermarket chains are fighting for customers against both discount retailers like Wal-Mart and Target and specialty grocers like Whole Foods and Trader Joe’s.

“The retail landscape for groceries has never been more competitive,” said Benedetti.

You can reach Staff Writer Robert Digitale at 521-5285 or robert.digitale@pressdemocrat.com. On Twitter @rdigit