Numerous Las Vegas Metropolitan region Fresh & Easy Buzz readers tell us--and consumers posting on the Las Vegas Review Journal comment board say--that customer store counts in many of the 11 Fresh & Easy Neighborhood Market grocery stores in the Las Vegas Metro region is regularly low. A comment we often get and read is that when these folks go into the stores, seldom are there many other shoppers in them.
We visited three of the Vegas region Fresh & Easy stores ourselves two weeks ago One store in the late morning, the other in the late afternoon, and the third at about 6pm. All three stores were near empty during the entire duration of our visits. We spent about 30 minutes in two stores and nearly an hour in another.
Union picketers and protesters in front of the Vegas stores
We also observed something in front of the Fresh & Easy stores that our Las Vegas readers and the posters on the Las Vegas Review Journal online comment board have been commenting on. That phenomenon is that outside of many of the Las Vegas stores there are picketers for the retail clerks union, as well as others protesting the stores for different reasons.
At some of the stores, there were numerous protesters or pickets out front. For example, read what Jerry Hilbert, a Las Vegas resident wrote on the Las Vegas Review Journal comment board today about the picketers in front of a Fresh & Easy store where he shops:
Jerry Hilbert wrote on April 17, 2008 04:42 PM: Maybe it is that in some ways Fresh & Easy is too sophisticated for the Las Vegas market. Most people here seem to be quite happy with filthy supermarkets, even nearly new Albertson's, Smith's etc. As for the union protesters, bring them on, I simply ignore their moronic mentality and enter the store. Since the protesters may not protest on private property, F & E customers need not worry, that is unless they too share the looser union member mentality and attitude. If that is the case, there is a really filthy Smith's at Ann Road and Decatur with looser unionized help.
At least he is shopping at the store though.
Herb from Las Vegas also weighs in on the picketing situation in front of the Fresh & Easy Vegas stores:
Herb wrote on April 17, 2008 03:15 PM: Maybe one of the reasons these stores do poor business is the intimidating looking protesters I see marching in front of their stores sometimes. I love the irony that they have a politically correct enviornmentalist theme (they even have special parking spots for hybird cars), yet liberals hate them because they aren't unionized.
Some of the Vegas Fresh & Easy stores are doing better than the others. However, we've been getting reports for some time about the lack of foot traffic in many of the stores. For example, read what Adam from Las Vegas says below:
Adam wrote on April 17, 2008 03:52 PM: I don't see this chain making it much longer. I went several times just for the $5 coupons they were giving away. However, it's not going to make my regular rotation. The only benefit they have over any other stores - including the big chains like Smiths/Albertsons, Trader Joes, and Sunflower Market - is that the place is always totally empty. That can't be a good sign. The other stores mentioned, each in their own ways, have a better balance of option, quality, and price.
In addition to our visits to the three stores last week, we visited three other Fresh & Easy grocery stores in February. We visited one store in the morning, another in late afternoon and another in the evening, so as to sample three different day parts. We spent about 45 minutes in each one. In a couple instances, there were a couple brief little rushes of business, but overall the customer traffic count was rather minimal and business was slow.
We also talked to about 15 shoppers in total on that visit outside the stores (we would have talked to more but there weren't any more than that at the times we were there). Not one of the 15 said they did their primary shopping at Fresh & Easy. Five of the 15 said it was their first visit to the store. All said they liked various aspects of the stores but were still doing their primary shopping at a larger supermarket or discount store.
We aren't suggesting our observations are scientific. However, they are snapshots of six stores, all visited at different day parts on two separate occasions almost two months apart.
Further, taken with the reports we get from readers in the region, and the numerous review boards we read like the Las Vegas Review Journal, Chowhound, Craig's List and many others, we believe it is fair to say many of the Las Vegas stores have low customer counts and can be defined as doing only moderate business.
Read what TJH, who loves Fresh & Easy (he has even given it a nickname, 'effenee') and is a regular shopper in one of the Vegas stores, says about the customer foot traffic issue below:
TJH wrote on April 17, 2008 02:44 PM: I really enjoy my local effenee. The food is always quality and they always have great discounts. But the thing I like best is that there are never any lines. Their meat and seafood are top notch, and their cheese selection is nice as well.
An occasional line means a store is doing lots of business after all.
Another regular Vegas Fresh & Easy shopper who loves the stores but none-the-less says they aren't doing well in his observation is Mark. Read Mark's opinion below:
mark wrote on April 17, 2008 02:47 PM: Too bad this isn't traded in the US markets. I'd love to short this POS. I love the stores I just know they are an albatross that lose money.
F&E Door-to-Door Marketing
We recently learned that as one way to increase foot traffic in the stores, Fresh & Easy has been having people (in some cases store employees we are told) go door-to-door in some of the Las Vegas neighborhoods where the grocery stores are located, distributing door-hanger Fresh & Easy fliers with coupons good for $5 off any store grocery order of $20 or more.
In the case of the employees doing the door-to-door marketing, we also are told they are to knock on the door and introduce themselves to the resident, let them know about the neighborhood Fresh & Easy store, invite them to shop at the store, and give them the flier and $5 coupon. [We've reported on the $5 coupons in the past. What's new is the door-to-door campaing; especially in cases where it would involve store employees.]
While this grass roots marketing technique has some merit as part of a comprehensive marketing plan, we don't believe it is near-enough to drive many customers into the stores.
Rather, based on our personal observation, conversations with readers and others in the market, and a content analysis over months of the online comment and review boards, we believe Tesco needs to launch a much more comprehensive marketing campaign--such as a combined radio and print campaign to start--as a way to drive consumers into those Las Vegas stores.
Keeping them coming back is another, more serious matter all together.
As we reported on Tuesday, Tesco CEO Terry Leahy said in a conference call and in a webcast video reporting the company's annual sales and profit numbers, that some of the best performing Fresh & Easy stores are doing over $20 per square foot in average weekly sales, which is higher than the average sales per square foot for supermarkets in the U.S.
It would have been interesting if Tesco had offered an estimate as to how many of its currently open 61 Fresh & Easy grocery stores that best performing number represents. Without that data, the statement is meaningless. Does it mean two stores, four stores, 33 stores? You get the point.
Despite this fact, its been interesting to see how many of the business sections in U.S. newspapers have just picked up that comment and wrote stories turning it into a statement that all the stores are doing above the U.S. industry average in sales per square foot. Both God and the Devil are in the details folks.
Today's announcement by Tesco's Fresh & Easy Neighborhood Market that it will build an additional ten stores in the Las Vegas Metropolitan region (there currently are 11 stores, with four more set to open soon) gives the retailer an opportunity to launch a comprehensive marketing campaign, the near-term goal of which should be to drive consumers into those stores, many of which as we've reported have low customer counts and need increased foot traffic.
With 25 stores in the region, the retailer can get much more bang for its marketing buck than it can with only 11. However, it remains that a number of the stores in the region aren't performing up to snuff presently. Time--and effort--will tell if that changes or stays the same.
Converting more Suzy's
If Fresh & Easy can convert more Suzy's, like the Suzy who posted the comment below on the Las Vegas Review Journal online comment board, to its Las Vegas stores it will be a big success. However, right now in our analysis, many of the Vegas-area stores are seriously lacking in foot traffic and customer counts--and the pickets and protestors out in front of the stores can't be helping the situation either.
Read what Suzy thinks of Fresh & Easy below:
Suzy wrote on April 17, 2008 09:58 PM: This is the best store I have ever shopped in! I used to shop Vons (I was willing to pay more to be in nicer, cleaner store), but now I do 99 percent of my weekly shopping @ F&E. Less expensive and better quality products. Love the idea of getting away from all the preservatives in other store's foods. Hope they stay in Vegas and the dirtbags stay at WalMart, Smiths, and Albertsons.
We suggest Tesco's Fresh & Easy Neighborhood Market should code name its comprehensive marketing campaign for the Las Vegas region--and although it doesn't currently have such a comprehensive campaign we think the retailer will figure out it needs one--"Operation Suzy."
Note: All full paragraphs in italics are from posts/comments taken directly from the Las Vegas Review Journal comment board.