In 2026, east Petaluma's busiest shopping corner gained three stores and is about to lose one. The former Kmart building at North McDowell Boulevard and East Washington Street reopened this summer as Boot Barn, Hobby Lobby and a second Petaluma Grocery Outlet. A few months later, Raley's announced it was leaving the center next door. When the changes settle in early February, the corner will no longer have the one-stop supermarket it has had for years. It will have a group of grocers that each do one thing well.
For anyone whose weekly errands run through this corner, that changes how the trip works.
Two centers, one corner
The owner, Gallelli Real Estate, runs the corner as two sister centers. The Plaza North sits in the northwest quadrant of North McDowell and East Washington, right along Highway 101. Its leasing brochure lists Hobby Lobby, Boot Barn, Grocery Outlet and CVS Pharmacy as its anchors and puts the center at about 191,256 square feet. The same brochure describes the directly adjacent Plaza South as anchored by Raley's, Trader Joe's, Petco and Big 5 Sporting Goods. Local news coverage folds all of it into "Plaza North."
The split matters because the two halves are heading in opposite directions this winter. The north side spent most of the decade with an empty anchor and has just filled it. The south side is about to lose its own anchor.
Six years dark, then three stores at once
Kmart opened at the corner in 1980, across McDowell from Lucchesi Park. For four decades its 90,000-square-foot store, which had a dine-in restaurant and an outdoor furniture and garden department, was the main anchor of Plaza North, according to the Argus-Courier. It closed in early 2020, when Kmart shut all of its California stores. Apart from the occasional seasonal Spirit Halloween, the building stayed empty for more than six years.
The City of Petaluma's project file describes the rehabilitation: one building divided into three suites, plus facade work, loading-dock and trash-enclosure changes, parking and circulation work, and new landscaping. The renovation took about a year. Boot Barn opened in early July, Hobby Lobby followed in mid-July, and Grocery Outlet opened between them on Thursday, Aug. 27.
The Grocery Outlet opening came with speeches, balloons and a ribbon-cutting led by Mayor Kevin McDonald. Victor Soares runs the new east-side store. Michael Billeci operates the original Grocery Outlet at the River Plaza Shopping Center on Washington Street, which is staying open.
The Argus-Courier noted that the new store opened "within a few minutes' walk" of a supermarket that had just announced it would close.
The dates between now and February
Raley's announced in August that the Petaluma store would close as part of a downsizing that includes at least six stores in California and Nevada. Raley's Chief Marketing Officer Carol Barsotti told the Press Democrat that "local market conditions and the long-term financial sustainability of these locations" were among the factors behind the closures.
The latest schedule, from a state WARN notice reported Nov. 6, sets out these steps:
- By Dec. 16, 2026: the Raley's pharmacy closes, more than a month before the rest of the store.
- Jan. 23, 2027: Raley's begins closing the Petaluma store.
- By Feb. 6, 2027: the closure is complete, 11 days after the Jan. 26 closing date the company first gave in August.
The WARN notice says about 40 team members will be affected, including 21 clerks. Raley's has said it will offer transfers to other stores to "as many affected employees as possible."
The pharmacy date comes first, and it is the one most likely to affect a regular customer before the holidays. The Press Democrat put it in context: the North Bay lost several pharmacies in 2022 and 2023, including the one at Petaluma's Lucky store. Raley's has a pharmacy page with a prescription-transfer tool. On the north side of the same corner, CVS Pharmacy is one of Plaza North's listed anchors.
What the corner holds once Raley's is gone
With the full-service supermarket gone, the corner still has three grocers within walking distance of each other, each with a different focus. Here is how the main errand stops line up, based on Gallelli's site plan and recent local coverage:
| Errand | Where it is | What sets it apart |
|---|---|---|
| Discount groceries | Grocery Outlet, Plaza North | Name-brand and fresh goods; the company advertises savings of 30% to 60% |
| Specialty groceries | Trader Joe's, Plaza South | Next door to Raley's in the south center |
| Mexican and Latino groceries, deli | Lola's Market, 241 N. McDowell Blvd. | North Bay grocer founded in Santa Rosa in 1992; produce, cafe, deli and catering |
| Pharmacy | CVS Pharmacy, Plaza North | One of the center's listed anchors |
| Pets and sporting goods | Petco and Big 5, Plaza South | Plaza South anchors |
| Crafts and workwear | Hobby Lobby and Boot Barn, Plaza North | The other two-thirds of the former Kmart |
The table shows the shift. A week's shopping that used to fit in one cart at Raley's will probably now take two or three stops, all within the same parking lots. Grocery Outlet describes its stock as "unexpected and rare finds" from what it calls "an opportunistic buying model." Trader Joe's and Lola's each cover their own ground.
For a traditional full-service supermarket, the Press Democrat lists Petaluma's other options as the city's Safeway and Lucky stores, Sprouts Farmers Market, and the locally owned Petaluma Market on Western Avenue. UFCW Local 5 President John Frahm described the citywide picture in that same Press Democrat report, saying North Bay communities "will have one fewer grocery option to choose from as prices continue to rise."
The rest of the stop: lunch, coffee and quick errands
The smaller businesses that fill out these centers are not part of the Raley's closure. Gallelli's Plaza North site plan lists these food tenants:
- Leolo Pizza
- Starbucks
- El Pollo Loco
- Grateful Bagel
- The Local
- Fuji Sushi
- Soban Korean Cuisine
- Fruta All Natural Ice Cream
- Don Pancho's Mexican Restaurant
- Hunan Village
- Simmer Vietnamese Kitchen
Services include Redwood Credit Union, Club Pilates, Massage Envy, the iWash Too laundromat, Batteries Plus Bulbs, Kim's Cuts and Super Nails. The center draws heavy traffic: the brochure cites about 108,200 cars a day on the stretch of Highway 101 beside it.
A single 90,000-square-foot box sat empty for six years. Three mid-size stores filled it in one summer.
The space Raley's leaves behind
The Raley's building goes dark in February at a corner with a recent example of an anchor space being split up and reused. Onita Pellegrini, CEO of the Petaluma Area Chamber of Commerce, told the Press Democrat that the closure is a loss for the people who made the store part of Petaluma "for so many years," and added:
"We hope that the location will ultimately bring another strong business or community-serving use to Petaluma."
Through Dec. 16, the Raley's pharmacy is still filling prescriptions, and the store's aisles stay open until the closing window starts Jan. 23. After Feb. 6, the corner's grocery shopping will be spread across Grocery Outlet, Trader Joe's and Lola's Market, with CVS on the north side handling pharmacy needs.
If you are wondering how the shifts at McDowell and East Washington fit with your own plans on the east side, John Hendricks is glad to talk it through. Schedule a local market consultation.
