Today's addition of the Desert Sun, the daily newspaper for the Southern California desert city of Palm Springs, reports that a neighborhood coalition wants a Trader Joe's grocery store in its city so bad, it's launched a petition drive to convince the retailer to open a store in this residential and resort town of about 75,000 residents.
According to David Carden Jr., chairman of the Baristo Neighborhood Coaltion in Palm Springs, the group has thus far obtained 3,500 signatures towards its goal of 5,000 on a petition asking Trader Joe's to open one of its 10,000 square foot specialty grocery stores in the city. Carden told the Desert Sun the coalition hopes to reach its goal by April 11, 2008. (Read the full Desert Sun story here.)
Palm Springs, which is located in the Southern California desert region, is not only a fast-growing residential area and one of the top retirement communities in the U.S., it also has a thriving tourism and convention industry--one of the biggest in the country in fact. The city is especially packed with tourists in the winter months (January through March) when the temperatures in the city and surrounding region are in the 90's, and often hit over 100 degrees. The city's demographics and overall income level fits very well with the types of locations Trader Joe's seeks out for its grocery stores.
Community groups petitioning Trader Joe's in this manner isn't that unusual. For example, a group in Albany, New York is currently conducting a similar petition drive--along with an agressive and professional lobbying and PR campaign--aimed at convincing Trader Joe's their city is worthy (and the demand is there) of a TJ's grocery store. A group in Nashville, Tenessee is doing the same.
Numerous other cities in the U.S. have launched similar petition drives designed to hopefully bring one of the popular Trader Joe's stores to their respective towns. In 2000, citizens in the Southern California city of Long Beach were successful in getting TJ's attention with such a petition drive and PR program--and as a result Trader Joe's built and opened a grocery store in that city.
This is the type of consumer demand most food retailers would trade a lifetime's worth of free groceries for. Fresh & Easy Neighborhood Market would love this level of demand in Palm Springs (and elsewhere), for example. However, despite the fact the retailer will soon open a Fresh & Easy store in Palm Springs, the neighborhood coaltion still wants a Trader Joe's. That isn't a critique of Fresh & Easy so much as its testimate to the brand strength of TJ's. However, it is something Tesco's Fresh & Easy Neighborhood Market senior management should study and learn from we believe.
Perhaps the Palm Springs' group doesn't even know Tesco's Fresh & Easy Neighborhood Market will soon open one of it's 10,000 -to- 13,000 square foot grocery markets--which have many similarities to TJ's, but also a number of differences--in the desert city soon. Of course, we think they should know, since Fresh & Easy has a number of its grocery stores located right around Palm Springs, and just opened a new store two days ago in the neighboring city of Palm Desert. Plus, it's not like their hasn't been any publicity regarding the British grocer's petite grocery stores in Southern California.
With these facts and realities in mind regarding Treader Joe's, here are a few things we would do immediatly upon reading this news if we were part of Tesco's Fresh & Easy Neighborhood Market senior management team:
>Call Mr. David Cardon Jr., head of the Palm Springs' neighborhood coalition, and invite him to a "coffee date" in downtown Palm Springs. At coffee, give him a brief overview of Fresh & Easy, including an overview about the new store that's set to open soon in Palm Springs. (Note: pay for his coffee and a pastry for him.)
Also during coffee, ask him if you and another of your Fresh & Easy collegues can meet with the Baristo Neighborhood Coalation, give them a brief presentation, and most importantly, ask them for their input in what they want in their Fresh & Easy that the stores' don't currently have. (We suspect they will tell you they want a numer of things TJ's stores have.) Bring them some Fresh & Easy fresh brewed coffee and a variety of treats on meeting night, by the way.
>Once you have informed the group about the coming Palm Springs Fresh & Easy grocery store, and listened to and written down all of their comments about why they want a Trader Joe's in Palm Springs so much, the hard work begins. You, Fresh & Easy executives, will need to decide what new elements, from the input from the group, you will implement in the Palm Springs Fresh & Easy store that just might be in your format. In other words, localization within the basic Fresh & Easy format blueprint.
We suggest you incorporate most of what they tell you they want into that store. You know the reason why: the group wants a Trader Joe's so bad in Palm Springs they're willing to work for it. We know Fresh & Easy is new, but we don't hear any groups--or even a single Plam Springs resident--creating much of a demand for one of your stores. We mean no offense; just telling you what we have learned.
Tesco needs to localize Fresh & Easy's style and merchandising mix
This gets us to the major point we're trying to make to Tesco's Fresh & Easy Neighborhood Market in this piece, with the help of the Palm Springs coaltion, who provide a perfect real life example. That point is: Tesco seriously needs to localize its Fresh & Easy stores more, including parts of the store design, its offerings, and its product mix.
We think Tesco can use its basic Fresh & Easy format as the template. However, within that basic template or blueprint, the stores need to be given more local positioning and a sense of place. For example:
>Design and sense of place: Tesco needs to put the "Neighborhood" in Fresh & Easy Neighborhood Market stores. The stores are supposed to be neighborhhod grocery stores, where people shop around, spend time, and buy a cart full of groceries. Rather, from our observation people are shopping the stores in the main like they do basic convenience stores. In other words, just buying a few items on their store trips. We bet the stores' average ring, an important food retailing metric, bears us out on this.
Tesco also needs to create some warmth, and more of a sense of place in the Fresh & Easy stores. We suggest one way Tesco can create this needed sense of place in the stores is to borrow a page from Tesco stores in the UK that have "Tesco Cafes," in-store cafe's like those so common in many American supermarkets today.
Since Fresh & Easy Stores are small (10,000 -to- 13,000 square feet on average) the "Fresh & Easy Cafe" can be smaller than those in supermarkets. We suggest an intimate, approximately 600 square foot petite cafe inside the store (not all stores neccessarily) as one way to create a sense of place in the grocery markets, as well as to encourage shoppers to spend more time in the stores. For example, Starbucks has numerous cafe's this size in supermarkets and in chain bookstores. They are very successful and add to the supermarket's or book store's overall sense of place, along with allowing customers to linger, and buy more.
Localization within the format template: The Western U.S., especially California, is the U.S. mecca for specialty and natural foods, groceries and other products. It has more producers in these categories than any other region in the country. It's also the per-capita number-one region (California the number-one state) in terms of specialty, natural and organic products consumption. California is the food products' trend setter; south and north. And "local" is big, no huge, in California among consumers.
However, when you walk into one of the numerous Fresh & Easy grocery stores in Southern California or Arizona, you see none of these facts and phenomenon's represented. No major offerings of southwestern foods in the Arizona stores, no extensive "made in California" merchandising in the Southern California stores, and no focus on the many local, artisan food and grocery product purveyers who populate both states in droves.
[Note: California also is the nation's number one and its most diverse agricultural producing state. California (and Arizona) consumers love large displays of fresh, bulk produce. It's what they are used to. That's one reason they love the state's many farmers' markets so much. The packaged fresh produce--which Fresh & Easy gets in bulk from suppliers and then packages at its distribution center--isn't going to make it, especially in California. If Fresh & Easy were to go to a quality, bulk fresh produce merchandising scheme instead of the current packaged one, we believe they would see at least an immediate 30%-40% increase in sales in the fresh produce category.]
The local angle plays a strong part again here with fresh produce. California has a bounty of fresh fruit and vegetable growers. In fact, Southern California is full of them. However, visit a Fresh & Easy grocery store in Southern California, and you're hard-pressed to find anything in the way of "locally-grown" fresh produce. That's a huge marketing mistake.
[Note to Fresh & Easy: Tip O' Neill, the famed former Speaker of the U.S. House of Representatives, was famous for saying: "All Politics is Local." He never lost an election, including the one among all his "local" fellow Congressman that made him Speaker, by remembering and practicing that motto for about 60 years in politics.
To paraphrase Tip O' Neill from a Fresh & Easy perspective: in the Western USA--especially in California--"Local is King." This doesn't mean Fresh & Easy must throw away the format. What it does mean is that success will come when the grocer uses that format as its template--and then localizes its stores to reflect a given community's history, culture, present and demograpics. This is one important key to Whole Foods Market, Inc.'s sucess. They even "localize" stores to neighborhoods within the same city, while keeping their basic format blueprint intact.
This localization needs to include design elements to the stores in addition to the product mix. For example, Tesco has signed leases for 18 stores in Northern California to date. The stores are to be opened in late 2008 or early 2009. Among those 18 stores include markets in San Francisco, Oakland and Napa.
These three cities offer perfect examples to explain the importance of localization within the format template. Each city has a rich and unique history, as do most California cities. Napa is America's premiere wine growing and producing region, as well as the country's number one place for specialty, natural and artisian foods innovation. We would hope a Napa Fresh & Easy store would reflect much of those facts in its design elements and product mix.
San Francisco, as we all know, is the culinary co-capital of the U.S., along with New York City. It's also a former gold rush town, and is today one of the top high-tech and internet-oriented business centers in the world. Additionally, San Francisco is a city of neighborhoods, each one having a distinct history and unique present. These elements should be reflected in any Fresh & Easy grocery store located in San Francisco. If not, San Francisco shoppers--who are major boosters of their city--will avoid the stores, branding them as just another cokkie-cutter chain.
Oakland, across the Bay Bridge from San Francisco, also has a unique history. Whole Foods' celebrated a major element of that city's history by building a store near the city's downtown that is designed like a European food hall, rather than like it's more typical format stores. The reason the grocer did this is the store's location sits right near a site that was a famous european-style food hall for decades, until there was a fire and the market, called Houswives Market, was eventually torn down. Despite this customization, Whole Foods still was able to use its basic format blueprint.
A Fresh & Easy in Oakland (there are three on tap thus far) need not be taken to this extreme in terms of localization--although Oakland loves its Whole Foods' Market Hall store. However, by not localizing the three stores to the history, culture and neighborhoods of Oakland, Tesco will likely decrease their odds of success with the stores in that city by at least 50% we believe.
Fresh & Easy needs some new direction
These are just a few examples of the direction we believe Tesco needs to go with its Fresh & Easy format and stores. There are a number of other suggestions we have based on lots of observation and research, but we will save those concepts and ideas for another time.
For now, using the Trader Joe's consumer demand phenomenon as a guide, it's our analysis that Fresh & Easy needs to do some serious evaluation of its format and operations, and to create more of a sense of place in the stores, localize the product merchandising mixes in the stores much better than they currently are, and institute a store design localization element, whereby the stores better reflect the history, culture and the present elements of the community and neighborhood they are located in.