SAN FRANCISCO—In certain parts of the city you can find a Starbucks and Walgreens around every corner, but in other neighborhoods, chain stores like these are nowhere to be found.
Under the San Francisco Planning Commission’s controls on formula retail stores, chain stores are only allowed to open in certain locations. Formula retail means the chain has 11 or more other retail sales establishments in the United States.
But there are still loopholes. For example, if an existing formula retail store under 50,000 square feet is absorbed by a larger chain store, no authorization is required for that larger chain store to begin operation in that location.
The City Planning code also does not address corporate brands, which is why Hayes Valley will soon see Gant, an international “corporate branded company,” open up shop on Hayes Street.
“People want to shop in an area that’s truly individual,” said Russell Pritchard, who has run Zonal Home Interiors on Hayes Street for 23 years. “That’s why the buyership in Hayes Valley is so high.”
Members of the Hayes Valley Merchants Association will be meeting with Supervisor London Breed this Friday to work out ways to close this “loophole.”
For instance, Gant only has eight standalone stores, but it does have “affiliate store” locations in department stores like Macy’s and Nordstrom. This also raises concerns like formula retail brands or corporations launching a new line that would operate its own stores such as GAP’s Athleta, new enterprises from companies that already have formula retail lines, and highly branded Internet retailers.
A Levi’s corporate manager recently came to Pritchard’s store and told him they were planning to open stores under their “Dockers line,” he cited as an example for the city attorney.
“It takes away the unique identity of a neighborhood where businesses are mostly sole proprietor, mom-and-pop shops,” said Pritchard.
Corporations are also able to pay higher rent, increasing the rent value of an area, which could drive out other small businesses, he said.
The Fillmore Neighborhood Association and Hayes Valley Neighborhood Association have already expressed their support for legislation to amend the planning code in question, and Pritchard plans to reach out to the Council of District Merchants as well.
“Small businesses fuel the economy of our city,” Pritchard said. “People support small businesses and then we [local business owners] spend our money locally—corporations don’t.”
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