Spencer's Fresh Market in SLO to close in January

The Laguna Village Shopping Center on Madonna Road in San Luis Obispo.
The Laguna Village Shopping Center on Madonna Road in San Luis Obispo.

Spencer’s Fresh Market in San Luis Obispo will close when its lease ends Jan. 31, its management announced Monday. It will be replaced by a 20,000-square-foot Grocery Outlet Bargain Market and another tenant to be determined.

The Spencer’s market has been at the Laguna Village Shopping Center on Madonna Road since 2009. It is the newest of the chain’s three locations on the Central Coast.

The closure is because of a “lease issue,” said Spencer’s spokesman D.C. Carter, of San Luis Obispo marketing firm S. Lombardi and Associates. He also said he thought heavy competition from other grocery stores in the area such as Target and Costco was a factor.

“It’s just a tough place for (owner John Spencer) and the sort of store he runs,” Carter said. “Grocery Outlet will be much better suited to the place.”

All of the market’s employees will be offered positions at the two remaining Spencer’s in Morro Bay and Santa Maria, Carter said. He said he does not know how many people that is.

Spencer did not respond to calls for comment.

At least eight grocery stores have closed in San Luis Obispo County in the past five years.

The Scolari’s chain, which operated four stores in California and 14 in Nevada, closed all of its Central Coast locations in April 2012. All three of those San Luis Obispo County locations have since been filled.

A Smart & Final store took over in Paso Robles in June 2012, and El Rancho Marketplace (now California Fresh Market) opened in Pismo Beach in November 2012. Most recently, an Albertsons opened in June at the former Scolari’s location on Johnson Avenue in San Luis Obispo.

The latest Spencer’s Fresh Markets closure marks the third for the company in as many years.

In 2012, the Arroyo Grande location closed its doors amid plans to relocate elsewhere in the Five Cities area. Another South County location was never opened.

Then in August of this year, the Atascadero store shut down because its building lease was ending, and its 20 employees were offered positions at other Spencer’s locations.

Carter confirmed some employees were transferred from Atascadero to the San Luis Obispo location and will now have to switch locations again.

Spencer is considering opening another location in San Luis Obispo or Santa Barbara counties, Carter said, but no decisions have been made.

The new Grocery Outlet Bargain Market should open by August 2014, according to a news release from Laguna Village management.

Grocery Outlet is privately held and is recognized as the nation’s largest grocery “extreme value” retailer, according to the news release. It is based out of Berkeley and has three Central Coast locations in Santa Maria, Atascadero and Lompoc. It also operates more than 200 stores throughout California, Idaho, Nevada, Oregon, Pennsylvania and Washington.