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A Grand Canyon

IF THERE WERE A PH.D. IN SPECIALTY FOOD, BOTH RICHARD AND JANET TARLOV WOULD HAVE ONE. Between them, the couple has put in the requisite lab hours equivalent at some of the nation's leading specialty retailers: Balducci's, Zingerman's, Dean & Deluca and Oakville Grocery. Two years ago, they capitalized on their schooling and opened Canyon Market in San Francisco, a 7,200-square-foot neighborhood grocery store with a strong specialty food component.

Tapping into Foot Traffic
Situated on a corner lot at the commercial hub of the city’s up-and-coming Glen Park neighborhood, the market serves a diverse community. “Our customer base is fascinating,” says Richard. “It’s an old blue-collar, working-class neighborhood that has transformed a lot, but not completely.”

As one of the last remotely affordable San Francisco neighborhoods, Glen Park has lured many young families and childless two-income couples in the past decade. Several bus lines and the Bay area’s rapid-transit (BART) system have stops near Canyon Market, providing easy access to downtown jobs, and a nearby freeway ramp takes commuters to Silicon Valley. But Glen Park is fundamentally a walking neighborhood and the locals shop often, habits that convinced the Tarlovs they could open a store without a parking lot.

Although the market still serves the neighborhood’s old-timers, the typical Glen Park patron is a natural food shopper, someone “who is very, very concerned” about eating wholesome food, says Richard. “I swear, half of our customers have read The Omnivore’s Dilemma,” says the grocer, referring to Michael Pollan’s best-selling book on the perils of the modern food supply.

Beginning with an Advisory Council
When their venture was still in the planning stages, the couple convened an advisory council with representatives from different segments of the community—moms, local business owners, neighbors—to learn what each wanted from the market. “That was hugely valuable,” says Richard. “I would encourage anyone thinking of opening a store to do that. They convinced us that there was more interest in organics than we thought, and they were right.”

To please their health-conscious and eco-friendly shoppers, the Tarlovs carry California-raised grass-fed beef, two brands of free-range organic chicken, eggs from pasture-raised chickens, non-dairy ice cream, whole-wheat tortillas, raw milk, biodegradable laundry soap and more brands and styles of yogurt than one would expect at a store of this size. Staffers record customers’ special requests on big paper sheets taped to the wall in the office area. “It doesn’t take much for us to bring something in,” says Richard. “Our livelihood depends on the immediately local populace. If we can save them a trip to another store, it’s to both of our benefits.”

Developing a Cult Following
Canyon Market features a full range of fresh produce, including several types of heirloom tomatoes in season. A coffee bar at the store entrance attracts commuters, who can grab a cappuccino and pastry for breakfast and a ready-made sandwich to take to work. For the after-work shopper with no inclination to cook, the store offers about 35 prepared dishes, some of them already too popular to take off the menu. Chef Edmundo Hernandez’ cochinita pibil (Yucatan-style roast pork) and chicken enchilada pie have a cult following; other top sellers include grilled salmon, sesame noodle salad and Thai-style roast game hens. The 15-foot-long prepared foods case is staffed, but a reach-in section on the customer side contains grab-and-go items in half-pint containers like housemade cole slaw and tuna salad.

This custom-made prepared foods case and an adjacent soup-and-salad bar came from a supermarket that was shutting its doors. “They were a steal,” says Janet, and the high-end fixtures’ low price made it possible for the couple to incorporate a salad bar into their scheme. It has been hugely successful, becoming a customer favorite.

The couple credits Balducci’s—“the Harvard of food,” says Richard, who worked there for five years—for much of their merchandising philosophy, a pile-it-high approach that makes maximum use of their limited square footage. “We make big displays that shout what they’re about,” he says. “It’s the principle of selling more with less.”

Canyon Market has a liquor license that allows for in-store tastings, a potentially lucrative feature the Tarlovs are just beginning to explore. They are building an email list of wine lovers and scheduling regular tastings at their small wine bar, events designed to boost sales throughout the store.

Vying for the Artisan Bread Customer
Although it wasn’t part of the couple’s original plan, an in-store bakery has proven to be a powerful customer draw. They credit Josh Allen, a longtime friend and professional baker in St. Louis, with persuading them that a bakery was possible despite the market’s small footprint. Allen, who became an investor, developed the bread formulas, trained the bakery staff, consulted on equipment and helped the Tarlovs design a 120-square-foot bake shop that turns out ten breads daily as well as cupcakes and cookies for the coffee bar. “A line develops as soon as the bread comes out,” says Janet. “Every week there are new customers who don’t believe their eyes when they see fresh bread.”

The crew bakes French-style baguettes twice daily in the German multi-deck oven, as well as multi-grain, rye, walnut, olive and white loaves, whole wheat baguettes and focaccia. The bread display, on Metro shelving, occupies a prominent corner location near the checkout lanes. Bay area shoppers are arguably among the most discriminating bread customers anywhere, with several artisan bakeries vying for their dollars. By baking in house, Canyon Market can offer shoppers a selection they won’t find elsewhere. The market’s extensive sandwich program uses housemade loaves exclusively, and any leftover bread resurfaces as croutons, crostini or garlic bread.

Navigating the Rough Spots
Not surprisingly, two years into their venture, the Tarlovs have identified some things they wish they had done differently. As they have learned the hard way, departments most subject to shoplifting—such as liquor and health-and-beauty aids—need to be located within direct sightlines of staff. They could have used a larger meat department and regret the lack of a dairy case that can be loaded from the back, although the start-up budget did not permit that.

Despite their many years in retail management, the couple says that staff training has been unexpectedly tough. “I was surprised by the challenges of managing 20-somethings,” says Richard, whose young employees have no qualms about text-messaging friends while on the clock. “We have to learn how to motivate and engage them.”

Citing Zingerman’s as a model, the Tarlovs have no plans to expand Canyon Market beyond its current location, believing that quality and consistency suffer with multiple units. But they would like the market eventually to spawn related businesses—such as a mail-order arm or a cafe—to provide opportunities for their best employees. “That’s how you retain valuable people,” says Richard. “But we’re not thinking of opening anything soon. We have our hands full.”

Janet Fletcher is a staff writer for the San Francisco Chronicle and author of The Cheese Course.