Andronico's on Telegraph Avenue will close
Andronico’s on Telegraph, one of the four stores in Berkeley. Photo: Tracey Taylor

Andronico’s Markets, the 82-year old supermarket chain founded in Berkeley, filed today for bankruptcy in Oakland. Four of the seven existing Andronico’s stores are in Berkeley: on Telegraph, Shattuck, University and Solano (the original store, founded in 1929).

Berkeleyside reported on the financial difficulties of the chain in May, and on a short-lived recapitalization plan.

The company’s announcement quotes CEO Bill Andronico today: “This is a bittersweet moment in our history. We have struggled mightily to keep going, but the combination of the economic downturn and a broken balance sheet was too heavy a burden.” In its bankruptcy filing, the chain listed debts of between $10 million and $50 million. The company is negotiating for financing and is also considering a sale to a private investor group.

The four Berkeley Andronico’s stores have been suffering recently from thin stocking of goods in comparison to local rivals. At the high end, it faces tough competition from two Berkeley Bowl locations and Whole Foods Markets. Safeway, which has ambitious plans to renovate its Berkeley and Berkeley-border sites, provides significant middle-market competition, and Costco in Richmond and Grocery Outlet (a Berkeley-based company) provide low-cost competition.

Fresh & Easy Neighborhood Market, a four-year old chain owned by the giant UK company Tesco, has been looking for a Berkeley site, according to people familiar with commercial property in the area. Depending on the financing Andronico’s secures from bankruptcy, at least one of the Berkeley Andronico’s sites might be a target.

Lance Knobel

Lance Knobel (co-founder) has been a journalist for nearly 40 years. Much of his career was in business journalism. He was editor-in-chief of both Management Today, the leading business magazine in Britain,...

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  1. “with unionized employees with good benefits and a living wage”
    dah–who pays for this–dah- yah right– we the customers pay for their  “good benefits and a living wage”.

    I dare say a lot of ‘us’ are out of jobs, it makes no sense to continue this, sorry, changes need to happen for all of us–

    Also makes sense WE should all join a union to get   ”’ good benefits and a living wage”‘

  2. I agree with Angstrom B, many times that I have gone into safeway, the clerks are talking about their dates, how much they drank, how they felt after they puked, who they were sleeping with, and on and on and on, all the while, we the customers are standing in line to pay for stuff, the grocery store unions should be canned as terribly out dated. 

  3. Speaking of unions, has anybody noticed that the Safeway on Solano prices are about 30% higher in general??  I figure the higher price(es) are to pay for the union so the store can still make a profit. 

  4. And another thing– if the financing goes through, Andronico guy will possibly stay on as head honcho. But frankly, wadr to headman, would you want the guy who was IN CHARGE to lead them out of their disaster?

  5. Damn shame, really. In a recession-or-whatever-we-are-experiencing economically, a high-end store is going to have it’s difficulties. It always seemed to me that whomever was doing the buying at that store, if they had a choice between getting the froo-froo expensive item or the reasonably priced item, froo froo would win out.

    I basically viewed Andronicos as another 7-11; a store to avoid unless in a rush. I feel for the employees for the transition some or all will face.

  6. Tisk tisk, Swollmer!
    Calling people names just because they don’t agree with your anti-development views doesn’t really fit into the kinder, gentler comment section Berkeleyside is trying to promote.

    Even someone who’s staunchly against mixed-use urban renewal (why?!?) there’s no question that the ugly white box that the University Ave. Andronico’s currently occupies is an extremely inefficient design that makes extremely poor use of the prime location of the lot.

    I can take or leave the apartments (or offices) on top, but the building needs to be flattened and rebuilt so that it can add an entrance on the University Ave side to encourage pedestrian shopping.

  7. In bankruptcy court, those NEGOTIATED contracts are BROKEN, Kat. Why? They are not enforceable once a company enters bankruptcy. It’s like trying to get blood from a stone. Beside, those contracts were RIDICULOUS! 1 million for 2 months for pension pay? Andronico’s must have had NO reserves at that rate. It’s like as if I personally showed up at your house, seized your bank accounts, emptied it, and said, “THank you for supporting my pension, Kat.”

  8. Swollmer, I think you will be about as successful at stopping development here as you were at stopping Trader Joes.

    Smart growth is the accepted approach to urban development.  Only a few NIMBY hold-outs still oppose it.

  9. Mr. Gman…don’t forget that the contracts between union labor and their employers are NEGOTIATED….

  10. Loisoreilly that is a great idea! I do my darndest to give Mi Tierra my business as much as possible; locally owned, the owner cares about the neighborhood and being a part of the community and thus has earned my business. Perhaps if they were a bit more ‘centralized’ more neighbors would do regular grocery shopping there and the quality of the produce would improve. As it is, they are offering a good variety of everything and at very reasonable prices. 

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  12. It may seem reasonable to you. After all, why not milk “The Man” for retirement money? This is the problem with American employees. They are parasites who kill their hosts. Can you understand why employers move factories to the South or China? If you’re still confused, maybe you should try being an employer too. Because “The Man” is the smoke behind the curtain. By the way, no employer should be responsible for 15,000 annual contributions. The contribution should be 0 dollars.

  13. Simplistic  urban renewal pipe-dreams by smart growth trolls.  The parcel is ~1.45 acres with the front of the lot in C-1 UASP Node while the back (mosly parking) is in R-4 constraining all new commercial uses to the front of the lot.    The University Avenue property includes many individual leasees beyond Andronicos; additionally Lee’s Florist next to Andronicos is on a seperately owned ~7,000 sq.ft. lot which together with buying out leassors makes smart growther’s grandiose schemes problematical to say the least.  My bet is a quick re-model into a BevMo or yet another Walgreens.

  14. It’s too soon to carve up the Andronico’s corpse yet, but if it comes to that a large-scale Latino-focused supermarket on University could indeed be as successful here as they are in San Diego County.  It would answer the “competitive growing niche” question very effectively and wouldn’t overlap much with Trader Joe’s up the street.

    And the North Shattuck store could successfully (re)model itself on an Italian theme after the east coast’s Eataly (think A.G. Ferrari times 20, with a focus on locally produced foods) — another popular  niche missing from Berkeley and a great fit for the Gourmet Ghetto.

    In other words, let’s replace the “super” markets with authentically themed specialty markets — diversity is Berkeley’s greatest attribute.

    Better either of those than too-slick-for-Berkeley “Fresh & Nasty” or the announced interest of Wal-Mart in opening small urban food-oriented “medium-box” outlets.

  15. Boringly suburban is a car-oriented standalone one story store surrounded by nothing but surface parking.

    More excitingly urban would be in the Trader Joe’s direction: intensively mixed-use and pedestrian oriented, with the store entry near and facing the Shattuck sidewalk and the parking moved underground or at least kept to the rear. Some housing above at a scale similar to recent buildings to the south.  And perhaps some other storefronts included.

  16. An idea which has merit: the small crowded Mi Tierra Mexian market at the corner of San Pablo/Addison could use the space advantageously AND create a work of art on the wall that faces University, similiar to what they created with their wall facing Addison (an outstandinly truly beautiful Mural).  Their products and prices are reasonable, the owner and employees care about their neighborhood, and their store on San Pablo also offers a smoothie bar and outdoor tables for eating. . . .  Believe if the Andronico’s on University could be converted into a new Mi Tierra market, it would be a real contribution to that portion of University Avenue.  The Andronico’s University location is extrememely accessible to pedestrians, bikers, and offers much, much more automobile parking.  

  17. $1 million for 2 months of pension payments comes out to $6 million a year.  $6 million divided by 400 employees equals $15k of pension payment per employee each year.  This amount is actually about 10% less than the maximum deductible 401(k) contribution amount.  
    Perhaps $15,000 annual employer pension contributions seem unreasonable to some in this town.  Not to me.

  18. Re: “Might just be related?”   Hey, I can play that game, too!

    Have you considered that this closely held company’s books and operational details aren’t public record and that purely speculative union bashing isn’t very convincing?  Might be?  🙂

    Gman, by the way, is claiming that Andronico’s is in arrears on pension contributions by an amount that works out to about $1500 per month per current employee, right?  Did I type the numbers in right?   Usually, that would mean that the per employee contributions they are behind on are way below $1500 (because they also owe money to previous employees) and that the size of the contributions are kind of normal among businesses that offer retirement benefits.

    If you think about it, the unions here do a favor to the business by offering the business a share of the tax benefit of the pension contributions.   The union workers CEDE TO THE COMPANY policy decisions about what percentage of their wages to put into retirement plans in exchange for extracting strong promises that the company actually pay up on those deferred tax / preferentially taxed parts of compensation.     In theory it’s a win, win:  the company gets some flexibility about the management of part of the wages it owes and the workers get a collective buying power in the pension market.

    I don’t know the case with Andronico’s but a common pattern with public corporations and municipalities is that the management screws up and tries to cheat:  they “borrow” against those promised contributions and, in boom times, they say that the investments are performing so well that maybe the contributions aren’t important at all — everything’s fine, let’s go shopping.    And then chickens come home to roost.   It ain’t unions that caused that problem its a failure of the executive to live up to a clearly defined fiduciary responsibility.

  19. Have you considered that this:
    “I definitely liked supporting a local store with unionized employees with good benefits and a living wage”

    and this:
    “in the last decade their prices have gotten more and more out of line with other stores”

    Might just be related?  The bankruptcy doesn’t rest entirely on unrealistic union wages, but I have no doubt that unreasonable and unrealistic union benefits and wages played a significant role.  See the post by “Gman” below too.

  20. Here’s hoping the stores manage to emerge from bankruptcy. I love the Andronico’s on Telegraph, and am close enough to it that I can time the sales. I shop there regularly and find it superior to either Whole Foods or Berkeley Bowl.

  21. Stefan, that may very well be likely for businesses in electronics, funds, etc  etc. But retail? Grocery? Where the competition is so stiff? Andronico’s would have to do a radical rehaul. Fire employees. Bring prices down. Change offerings. Even then it would still face very, very stiff competition.

  22. Great comments, Eric, BBnet3000, & Charles.

    The University Ave. Andronico’s needs a complete demo. & rebuild. It’s a prime location that is poorly served by the bad design of the current building. I would love to see a locally owned market like Berkeley Bowl or Monterey Market buy that building and replace it with something more pedestrian-friendly.

    I just hope the building doesn’t get designated with local “landmark” status and end up with endless blocking and stalling from a newly-formed “Concerned Andronico’s Users” group.

  23. It’s worth noting that the Borders bankruptcy proceedings started off pretty optimistically as well.

  24. Thanks for the reply, Charles.

    I’m split about the housing above the store (I can at least understand why Safeway wouldn’t want to have to deal with tenants in a city as litigious as Berkeley.) but I completely agree that some sort of storefront or entrance facing Shattuck would really improve the atmosphere along that stretch.

  25. Bankruptcy does not necessarily mean that Andronico’s is going out of business or closing it’s stores. Andronico’s filed Chapter 11 bankruptcy, which means that Andronico’s management is seeking protection from it’s debtors while it tries to resolve it’s financial problems. The whole point of “Chapter 11” bankruptcy protection is to allow organizations to try and survive.

    Most companies attempt to restructure themselves during Chapter 11 bankruptcy, or try to obtain additional capital from investors. Andronico’s will probably lay off some staff and attempt to shut down some of it’s less-profitable operations. Andronico’s will need to establish a timeframe with it’s existing debtors and investors. If it cannot meet it’s timeframe, then the Bankruptcy Court, debtors and investors will be forced to take drastic action.Many companies emerge from Chapter 11 bankruptcy without going out of business. It’s entirely possible that Andronico’s will change and survive.

  26. Charles, every bankruptcy entity releases a statement like this. But it’s impossible to keep the status quo without affecting some party…in this case, it’s going to be probably a bit of everyone…unionized employees, vendors, creditors, you name it. They may close a couple of underperforming stores, but not all….that would be liquidation, which has not been necessary because they found Renovo to capitlize the business

  27. Everyone seems to be assuming that bankruptcy means all the stores will close, so let me quote from the Mercury-News article linked in this post:

    Andronico’s Markets files for bankruptcy and plans to sell itself, but its seven stores will remain open

    Andronico’s said its seven
    stores will remain open and its 400 workers will stay on the job while
    the grocer attempts to work out its financial problems.

    Andronico’s is negotiating
    with Renovo Capital to obtain financing to keep operating during the
    bankruptcy proceeding. The grocer also is in talks for a sale to a
    private investor group. There was no assurance that the grocery would ultimately land the financing or complete a sale. Failure to land both could imperil the storied, high-end chain.For
    now, officials said, it will be business as usual. “The markets will
    stay open and the employees will keep their jobs,” said Adam Alberti, a
    public relations representative for Andronico’s.

  28. I think the problem with the Shattuck Ave. Safeway remodel is that the entrance of the store faces the parking lot rather than the sidewalk and much of the site is taken up with a surface parking lot – two typically suburban design features. 

    Not to put words in his mouth, but I believe Alan wanted housing above the shopping and stores facing the sidewalk to appeal to pedestrians.

  29. This is what happens when unions push prices to impossible levels. Were unions completely responsible for Andronico’s bankruptcy? Of course not. But Andronico’s owes more than 1 million for just 2 MONTHS of pension payments to UFCW. !!! 1 MILLION for 2 MONTHS? That money could have gone to paying vendors, building up capital reserves, and hiring new managers to execute strategy. Now what’s likely to happen? Get rid of union contracts, close a few stores, sell real estate to get some cash, and try to lower prices. That’s right. All the things management should have done without having to go through bankruptcy. So call your favored union and tell them to change strategy. Oh yeah, our state/federal/local governments do NOT need unions. Talk about inefficiency and high labor prices…

  30. I agree completely.  The store on University Ave. (originally a Co-op) was designed inside-out: The storefronts face the parking lot inside of the block, and ugly blank walls and loading docks face the sidewalk.

    The best treatment for this site is to demolish the buildings and start over, to build a traditional urban design with stores facing the sidewalk and housing above the stores. 

  31. Agreed. The one on University would be perfect for that. The blank walls on University should go, and its a block from BART to boot.

  32. With the love of food we have in Berkeley, I’m hoping for the best at these 4 sites. We need to keep these walkable food and household supply sources! Time to reinvent.

  33. What’s “boringly suburban” about the newer style of Safeway stores, and what do you see as an example of an “excitingly urban” supermarket style?

  34. I shopped at the University Avenue Andronico’s for six years and found it consistently understaffed. Also, I found more out-of-date products on the shelf there than at any store in memory. I have never remotely encountered such problems at Trader Joe’s or Whole Foods. And the prices were well beyond the comfort zone of this working person: living in central Berkeley without a car made me a virtual prisoner of Andronico’s before the very welcome advent of Trader Joe’s.

    Ultimately, businesses exist to the extent to which they serve the needs of their customers.

  35. Maybe the near-term reconstruction of the Safeway stores on Solano and north Shattuck will buy Andronico’s some breathing room for a year or so.  But breathing room only: the upgraded Safeways will return more competitive than ever, even if boringly suburban in design.  

    What Berkeley food-market segment can Andronico’s succeed in? And what’s a regional example of success with that?

  36. I feel so mixed about this. I really liked the employees at my local Andronicos, and I definitely liked supporting a local store with unionized employees with good benefits and a living wage. And the vibe is a lot better than Whole Paycheck.

    On the other hand, in the last decade their prices have gotten more and more out of line with other stores, and the produce has been going downhill for a while.

    I hope they get good management who manages to revitalize the chain (and keep the one around the corner from house in business).

  37. I happen to know the Andronico’s Story. It would be very sad to see them go. I hope that they can re-organize and re-build. It is an American story, as much as any monument in our Country that represents the individual business spirit. We can’t just let big chains take over. It’s hard to adjust to the times, when you are already invested in it. Where a door closes a window opens. We need Andronico’s more than just a grocery story. God bless your journey. -Stacy

  38. They have the best employees of any supermarket.  I’ve gotten to know them over the last 20 years!  And they never make you wait in long lines. Sad to see them go.

  39. I’m sorry, but the staff at the University store turned over about 6 years ago.  All the nice employees were gone.  And the replacements were the most surly, ambivalent bunch of checkers I ever shopped around.  They made the people at Pack-And-Save in E-ville look good.  So there I went.  And I never looked back.  I know it’s politically incorrect to say this in Berkeley, but maybe, just maybe, grocery store unions aren’t that great of an idea anymore.  They may have better jobs, but they didn’t produce a better product.  Good.  Riddance.

  40. I will miss Andronico’s, where I’ve shopped since the old Coop closed, both on Solano and Shattuck. I admit, I also  buy things at Costco, Monterey Market, and various farmers’ markets. And I have noticed how empty the two Andronico’s stores where I shop have been lately. I hope at least one of them can stay alive. I also appreciate the employees.

    I find the local Safeways dirty and offering inferior products, while Whole Foods (whole paycheck) is expensive and inconvenient from where I live.

    Trader Joe’s is non-union, carries a limited selection of products, and from my point of view is not user-friendly.

  41. Well, all of you who want to be forward thinking, but promote Trader Joes and Whole foods and other nonunion chain stores over a locally owned union store should be thinking about your priorities.  I am indeed very sad to lose Andronicos.  I’ve shopped at one or another of their stores ever since I moved to Berkeley in 1993, and have been very satisfied with the choices, with the produce and with the very friendly kind employees.  I hope they can find good jobs elsewhere.

  42. I hope my friends…all the employees at the Telegraph store…are well taken care of. I hope that the store stays open and the employees are kept there…if not, I am willing to write recommendations…

  43. As much as we loved to hate the store, it’s really too bad to hear this sad news. I hope we don’t lose our neighborhood store. With Elephant Pharmacy gone, the neighborhood won’t be the same…

  44. It isn’t just that Andronico’s didn’t follow food trends fast enough. They seemed to be unaware of what the markets around them had in stock and were charging.

    I remember several years ago when we still used to shop at Andronico’s, we ran out of milk and went to the corner liquor store to get some. It was surprising to me that the corner store had the same type of  Berkeley Farms milk for a lot less than Andronico’s. And corner stores are known for higher prices and higher margins. At some point above market pricing is going to severely discourage customers.

    While I have some sympathy for the notion that we consumers ought to support locally owned and operated businesses, I think that we ought to expect that because these businesses are local, that they ought to understand the needs of the local markets better than the national chains. I don’t think that Andronico’s did this at least at their University Avenue store where we used to shop.

  45. I my mind, four shuttered suburban-style supermarkets equal four opportunities for mixed-use infill housing. It’ll be interesting to see if Berkeley puts its money where its mouth is. Even if we don’t get mixed-use—perish the thought—I hope that whoever takes over the stores makes some much needed
    pedestrian improvements. All of the Berkeley Andronico’s locations feature design that is hostile towards pedestrians to some degree. Meanwhile, Berkeley Trader Joe’s is a shining example of design that is very accommodating to all shoppers, whether they walked, biked, or drove. Hopefully we can at least get some street-level transparency out of the Solano and University Avenue stores.

  46. really too bad. i remember going in there as a kid.

    but i have to say, when i go inside and look around, i observe it’s not just that andronico’s faced stiff competition, it somehow did not know how to follow the trends in food preferences. people that can afford andronico’s specifically shifted their food budget to “real foods”. that’s where the “gourmets” went.

    my gratitude to the employees, also.

    there are still other markets like piedmont grocery, the ranch market, and others that serve a similar clientele.

    what are some other andronico’s alternatives?

  47. I hope the best for the great employees I’ve done business with over the years. I figure they may end up with one or two stores in Berkeley if they’re lucky.

    I love the second paragraph from “guest!”

  48. I hope the awesome employees can find jobs elsewhere.  Some have worked for Andronico’s for many, many years. 

    If the store on University ends up closing I hope a pharmacy takes over the space.  We really need a drugstore in the neighborhood.

  49. With four stores potentially going dark, I don’t think neighbors can afford to be too obstructionist in terms of what goes in there.