Back in the 1970s when Chez Panisse first opened, the neighboring area became known as Gourmet Ghetto, and it has continued in that tradition since then. The area is packed with wonderful foodie joints, fine restaurants and specialty food shops as well as boutiques like Earthly Goods (above).
The French Hotel (above) is in the same neighborhood and has a great espresso bar on the ground floor. A couple of doors down is the Cheese Board Collective, famous for their special pizzas that people line up for while being entertained by a jazz band and then eat, picnic style, on the center median strip of Shattuck, despite signs saying not to. (This previous post has funny video of people breaking that particular rule.)