Saturday, May 31, 2008

Breaking News: Tesco Has Two New Fresh & Easy Stores in the Pipeline For San Francisco Bay Area; Brings Total to Date to 20 Units For the Region

Tesco's Fresh & Easy Neighborhood Market, which already plans to open a grocery store in the San Francisco Bay Area city of Vallejo as part of its first wave of 18 confirmed stores set to start opening in the region early next year, has two new additional store locations in the city in the pipeline, according to Susan McCue, an official with the Vallejo Economic Development Department.

The first Vallejo location, for which a lease has already been signed, is at Oakwood Avenue and Springs Road, as we reported here on January 30, 2008. That store is expected to open in the first quarter of 2009.

The other two Vallejo stores in Fresh & Easy's pipeline are expected to open sometime next year. We don't have addresses for the additional two stores yet, and the state of California Department of Alcohol Beverage Control says Fresh & Easy Neighborhood Market hasn't yet filed applications for off-sale beer and wine for the two Vallejo stores.

The city of Vallejo is aggressively courting new retailers to come to the city because its needs an infusion of sales tax monies in order to operate the city. Last month the city filed for bankruptcy, which is a rare thing for a municipal government to do in the U.S.

However, even after cutting expenses dramatically, the city couldn't find a way to make its revenue's meet it expenses, including it's current deficit, so it decided to file the bankruptcy petition and seek relief, giving it time to reorganize its municipal finances.

This is where new retail comes in for the city. In addition to Fresh & Easy, Vallejo is courting category-killer beverage and specialty foods retailer Beverages & More to open a store in the city.

Click here for an enlarged version of the map above

Beverages & More is based in nearby Walnut-Creek and has stores located throughout California and in other Western USA states. The stores offer a wide-variety of spirits, wines, beers, non-alcoholic beverages, specialty and gourmet foods (including some prepared foods) and related items like drinking glassware, candy, snacks and a limited assortment of non-foods items related to food and drink.

Food isn't taxable in California but alcoholic beverages and non-foods items are, so the city can collect its portion (a portion goes to the state) of sales tax revenues from the sale of those items in the Fresh & Easy and Beverages & More stores.

Vallejo was recently hit with a big potential retail sales tax revenue blow however, when Wal-Mart backed out of it's plans to locate a huge Supercenter in the city because of opposition from community groups. On Friday, Wal-Mart told the city it was withdrawing its application for a Supercenter in the city, after four years of trying to get the store built amidst lots of opposition from community groups and local small businesses.

Home Depot plans to locate a store in a former Wal-Mart discount store building in the city though, according to McCue, so that should be a boost to the city's sales tax revenue since nearly 100% of everything sold in a Home Depot has a sales tax.

Wal-Mart's change of plans for a Vallejo Supercenter could be good news for Fresh & Easy; unless Wal-Mart decides to put a couple of its new, small-format (15,000 square foot) Marketside banner combination basic grocery and in-store prepared fresh, prepared foods format stores in the city, which it might bring to California after the initial stores open in Arizona this summer, as we reported here. Of course, since the first Marketside stores haven't even opened yet, it's a moot point at present.

Meanwhile, the fact Fresh & Easy plans to open two additional stores in Vallejo for a total of three thus far in the city of about 130,000, demonstrates once again what we mean by what we call the retailer's "critical mass" retail store location strategy. That strategy is to locate a "critical mass" of stores close together (about 1.5 -to- 2 miles apart eventually) in key target market regions and in the cities in those regions. Think Starbucks' and Walgreens drug stores' strategies for example.

Having three--and possibly more down the road--grocery stores in a city the size of Vallejo is building fairly strong "critical mass," even if those stores average about 10,000 square feet like the small-format combination basic grocery and fresh foods Fresh & Easy stores do.

It also shows Tesco wants to be a major food and grocery retail player in the San Francisco Bay Area like it does in Southern California, Arizona and Nevada.

As we reported some time ago, Tesco's Fresh & Easy Neighborhood Market has plans to open far more than the initial 18 grocery stores its thus far has confirmed for the Bay Area. In addition to these two new Vallejo stores in the pipeline and set to open next year, there are more coming up in other Bay Area cities. We will be reporting on those additional new San Francisco Bay Area stores soon.

Tesco PLC News: Tesco to Buy Royal Bank of Scotland's Share of 'Tesco Personal Finance' Business Joint-Venture For About ~1 Billion

Tesco PLC, parent company of Fresh & Easy Neighborhood Market USA, plans to acquire Royal Bank of Scotland's 50% share in the two companies' personal finance business joint venture, tomorrow's UK Sunday Times will report.

For those not already aware, major UK retailers like Tesco and Sainsbury's operate finance and insurance divisions, as well as being major players in the Internet service provider and mobile phone businesses, along with their food, grocery and hard and soft goods retailing operations in the nation.

These finance businesses are full line operations--banking, loans, credit cards--rather than the limited ones U.S. retailer's like Target and others operate which are just divisions designed to handle their own credit card business with customers.

Tesco is the leading retailer in the finance and insurance sectors in the UK. Sainsbury's also is a major player, as to a lessor extend is Wal-Mart-owned Asda.

In Tesco's case, it's substantial finance industry business has been owned in a 50-50 joint venture with the Royal Bank of Scotland (RBS), one of the UK's leading banking companies.

According to earlier reports, RBS turned down Tesco's offer to buy its 50% share of the finance business last month. However, it appears according to the Sunday Times' report the deal is now on.

Tesco's personal finance arm makes loans, issues credit cards and offers other personal financial services to consumers, but not to corporate or business customers.

If it acquires the 50% of RBS's share as the Sunday Times reports indicates is going to happen, 100% ownership of the personal finance business will allow Tesco to not only control the business completely, but to make a number of changes and add numerous new lines of business that's it's wanted to do for sometime but has been unable to because of the politics of the 50-50 joint venture.

Tesco also is a major player in the consumer insurance business in the UK. It's insurance arm offers consumers health, auto and other lines of personal insurance. Tesco's insurance operations are part of Tesco Personal Finance. You can learn more about Tesco's personal finance and insurance business here.

In contrast, big U.S.-based supermarket chains and mass merchandisers like Safeway Stores, Inc, SuperValue, Inc., Wal-Mart and Target, aren't in the personal finance and insurance business at all, with the exception of the Target (and a couple others) example offered above.

In fact, last year Wal-Mart wanted to open its own U.S. bank and financial institution which would function somewhat along the lines of what Tesco, Sainsbury's and Asda do in the UK--offering loans and related products to consumers.

The objection was so strong from U.S. Federal Government financial services regulatory agencies, Congress and various consumer groups however, Wal-Mart pulled back and decided to only set up an operation similar to Target's, which only deals with the mega-retailer's own credit card customers.

Thursday, May 29, 2008

Mashed Potatoes Item Number 3 Million at Fresh & Easy's Kitchen; We Suggest A Ceremony Knighting the Side-Dish as 'Sir Spud'

Tesco's Fresh & Easy Neighborhood Market USA announced today in a press release that its central kitchen at the food retailer's Riverside County distribution center in Southern California has today produced prepared foods product number three million. We really aren't sure if that's a lot--61 stores, lots of different prepared foods skus, ranging from simple sandwiches to ready-to-heat entrees and all--but it sounds good.

The lead sentence of the press release--"Fresh & Easy Neighborhood Market's Kitchen today produced its 3 millionth product, a 17 ounce package of fresh & easy Mashed Potatoes, which retails for $1.99 and is made using only potatoes, milk, butter, cream, salt and pepper, without additives or preservatives"--should make the Governor of Idaho take notice and swell with pride.

For those not in the know, the potato is King--and Queen--in Idaho.

Whereas famous musicians like Sir Paul McCartney and supermarket chain CEO's like Tesco's Sir Terry Leahy are given the title of Sir by the Queen in England, were the Governor of Idaho to be given such royal authority by his state's constitution, he would most likely use it to knight potato farmers and other promoters of the famous Idaho spud. I pronounce you "Sir Spud," he might say.

In addition to the mashed spuds being prepared foods' item number 3 million to roll off the line at the distribution center kitchen, Fresh & Easy is introducing starting today 23 new prepared foods items in its 61 stores in Southern California, Arizona and Nevada, says Fresh & Easy corporate chef Mike Ainslee.

Among the new prepared foods' items the chef is touting include: Shepard's Pie, Ratatouille, Meatloaf Dinner, Braised Beef and Chicken Breast Marsala. A member of the Fresh & Easy Buzz team happens to be a Shepard's Pie lover (no sheep jokes please), so we'll likely be hearing a review of that new item next time he gets into a Fresh & Easy store and picks one up.

Chef Mike, as either he refers to himself or as the PR person who wrote the release refers to him, created the recipes for all of the fresh & easy brand prepared foods items himself, including the 23 new items being introduced in the stores starting today.

There are lots of prepared foods' items under the fresh & easy store brand, so we take our caps (chef's hat is at the dry cleaner) off to chef Mike, as we know it isn't easy to create that many items in the time he's had to do so. Of course, consumers will be the judge as they always are, voting with their pocketbooks in terms of which of the many of the prepared foods items they like and thus buy on a regular basis.

The introduction of the 23 new prepared foods items (or kitchen items as the grocer calls them) in the 61 small-format combination basic grocery and fresh foods Fresh & Easy grocery markets is part of the retailer's program to introduce 250 new items into the stores over the next couple months, as we reported here.

These items include many more fresh, prepared foods items, along with new fresh & easy store brand products in other categories like fresh meats, grocery and others.

We have a suggestion for chef Mike: Since mashed spuds were prepared foods item number 3 million at the kitchen, how about a celebration?

Since Idaho's Governor unfortunately doesn't have the powers vested in him in the state's constitution to offer knighthood, how about awarding the 3 millionth prepared foods item--the mashed spuds--the title of "Sir Spud."

The mashed potato side dish could be awarded its title of Sir at an in-store ceremony, conducted in the same way the Queen does her official ceremonies. Royal peerage and all that stuff. Perhaps Sir Terry could officiate if available since he does carry the title. Or even better, maybe the Duke of York would be willing to make a return engagement to a Fresh & Easy store in order to conduct the ceremony. After all, he was at the Compton store for a mere grand opening.

Once awarded its title, the mashed potato side dish could then be preserved either by freezing or dehydration for historical purposes. For example, when kitchen item number 6 million is produced (perhaps it will be something that goes well with mashed potatoes), the royal spuds can be reconstituted for eating; the result being not only a historic, but royal meal.

Just a thought.

Tesco Makes Official Announcement of Jeff Adams' Title and Position at Fresh & Easy Corporate; Confirms Our Report of March 5

On March 12 Fresh & Easy Buzz was one of the first publications to report that Jeff Adams, the former CEO of Tesco PLC's Tesco-Lotus retail division in Thailand, was joining Fresh & Easy Neighborhood Market USA in a senior executive position reporting directly to CEO Tim Mason.

Yesterday, Tesco's Fresh & Easy Neighborhood Market formally announced (and confirmed our March 5 report) that Adams has joined the small-format food retailing venture as executive vice president of operations, reporting directly to Tim Mason.

An interesting aspect of Adams' position and title is that he will share it with Bryan Pugh, who held the executive vice president of operations title (and keeps it) and position prior to Adams' arrival from his duties as CEO of Tesco-Lotus in Thailand.

Adams has been working at Tesco's Fresh & Easy Neighborhood Market corporate offices in El Segundo in Southern California for some time, despite the retailer only making the official announcement (and confirmation of our March 5 report) yesterday.

A Fresh & Easy corporate spokesman says Adams, who was born in the United States, will be on the same level as all of the grocery chain's senior corporate executives, each who reports directly to CEO Mason.

For Adams, assuming the co-executive vice president of operations position at Fresh & Easy, which is essentially a start-up with only 61 stores currently open in Southern California, Arizona and Nevada, has likely been a change from his last assignment with Tesco as the CEO of Tesco-Lotus in Thailand, which not only has higher sales than Fresh & Easy, but of which he was number one as CEO.

Additionally, it isn't clear how the co-executive VP's of operations will divide up their duties.

Austin, Texas-based Whole Foods Market, Inc. has a similar arrangement however, with Walter Robb and A.C. Gallo both having the title co-president and the same job description, and reporting directly to CEO John Mackey.

Despite the Whole Foods example, it's still the exception rather than the norm to have two senior executives sharing the same position and title in U.S. food and grocery retailing. Perhaps it's enlightened though, if it can work.

The official position of Tesco's Fresh & Easy Neighborhood Market is that Adams, who was raised in West Virginia and reportedly worked for Wal-Mart in the USA for a time, was added to the grocery chain's senior executive ranks in order to help with Fresh & Easy's rapid store expansion program.

While this is part of the reason for Tesco having Adams leave his CEO post at Tesco-Lotus in Thailand, it's not the complete reason.

Our sources for the March 5 report, including one very close to Tesco PLC operations in the United Kingdom, told Fresh & Easy Buzz Tesco CEO Sir Terry Leahy hoped at the time the fact Adams was a native of the U.S. would help the fledgling Fresh & Easy chain better adapt to U.S. food retailing conditions, as well as add an experienced hand to the team.

Fresh & Easy is preparing to resume its rapid new store opening program however. That program saw the retailer open 61 stores from late October, 2007 -to- March, 2008, which is a new store opening rate of about one new store every 2.5 -to- 3 days over that less than six month time period.

As we reported here On March 29, Fresh & Easy Neighborhood Market is taking a three month pause in opening new stores from April until the end of June next month. The next new Fresh & Easy small-format, convenience-oriented grocery store will open on July 2nd in the Orange County city of Manhattan Beach in Southern California.

Tesco has been inking numerous leases for new stores in the last couple months, as Fresh & Easy Buzz readers are aware from our numerous reports on the topic. The company also has numerous Fresh & Easy grocery markets in the pipeline set to open throughout this year in Southern California, Arizona and Nevada.

Additionally, Fresh & Easy Neighborhood Market recently acquired 10 empty former Rite Aid drug store buildings in the Las Vegas Metropolitan region which the grocer is in the process of converting to Fresh & Easy combination basic grocery and fresh foods markets.

New markets also are in the works. Tesco plans to open five Fresh & Easy grocery stores in Bakersfield and Fresno respectively in California's Central Valley early next year. These will be the first Fresh & Easy stores for Tesco in these markets.

One store also is thus far planned for Modesto, which is in the Northern San Joaquin Valley region of the Central Valley, about 130 miles north of Fresno.

Further, next year will bring Tesco's big push into Northern California, when it starts opening the first of its planned 19 stores in the Sacramento Metropolitan region and 18 stores in the San Francisco Bay Area.

Lastly, Tesco plans to build and operate a Northern California distribution center in Stockton, which is in the Northern San Joaquin Valley, about 30 miles from Modesto and about 70 miles from San Francisco. The plan is to have the DC up and running by the end of this year or early next year so it can supply all of the planned Fresh & Easy grocery stores set to open in Northern California.

This aggressive new store opening schedule, beginning with the Manhattan Beach store opening on July 2, should keep both Adams and Pugh busy as co-executive vice presidents for operations.

Tesco originally said it planned to have 200 of the small-format, convenience-oriented combination basic grocery and fresh foods Fresh & Easy markets opened in California, Arizona and Nevada by the end of 2009. The retailer recently scaled back that number, saying it expects to have in the neighborhood of 150 Fresh & Easy grocery stores opened and operating by the end of 2009.

Wednesday, May 28, 2008

Las Vegas Market Report: A 'Food Desert' Neighborhood to Get A New Grocery Store; But it's Not A Fresh & Easy Neighborhood Market

Regular Fresh & Easy Buzz Las Vegas, Nevada correspondent Michael Vegas tips us to a report on local television Channel 8 about a low-income neighborhood in the city located west of downtown which has been trying to lure a grocery store to it for years.

The majority African American-populated neighborhood doesn't have a grocery store in it that offers a decent selection of basic groceries and fresh foods like produce and meats at affordable prices. In other words, it qualifies as an urban, inner city "food desert," or a neighborhood underserved by grocery stores.

The neighborhood has been completely without a grocery store since a Safeway Stores, Inc.-owned Vons supermarket closed in 2004.

Now, Channel 8 reports the Las Vegas City Council has lured a new grocery store to the neighborhood. But, it isn't a Tesco Fresh & Easy Neighborhood Market store--despite the retailer's statements that one of its key strategies with the small-format, combination basic grocery and fresh foods chain is to locate stores in regions it does business in "food desert" neighborhoods.

Rather, a California-based grocer named "Buy Low Market" will be opening a store in the low-income Las Vegas neighborhood west of downtown, according to the Channel 8 report.

Safeway Stores, Inc. owns the building (pictured at left) and will be subleasing it to the company that operates Buy Low Market.

Buy-Low Market is a banner of Carson (Southern) California-based K.V. Mart Co., an independent, privately-owned, value-based discount supermarket company. In addition to the Buy-Low Market banner, K.V. Mart operates supermarkets and discount warehouse stores under the Top Value, Value + Food Warehouse, Price Rite, Value Mart Food Warehouse, and Amar Ranch banners.

K. V. Mart operates 22 stores, and is considered one of the most successful multi-store independents, in Southern California.

The minority-owned food and grocery retailer has operated stores in Southern California for about 30 years, using an everyday low-price, value model. K. V. Mart also is considered a top ethnic foods retailer--especially Hispanic-oriented--and has won numerous industry awards for its ethnic foods merchandising and promotional programs.

The retailer currently operates three stores, all in Southern California, under the Buy Low Market banner. The Las Vegas store will be its first unit outside of the region. [Click here to view the current weekly grocery advertising circular for K.V Mart's Buy Low Markets chain, as well as for its other banners.]

However, not all is paradise in this Sin City neighborhood. According to the Channel 8 report, a number of neighborhood residents are skeptical about the Buy Low Market, which will sublease the vacant Vons supermarket space, because they weren't given a say in the matter and aren't sure the grocery store "is any good."

"It feels as though this is shoved down our throats, like this is what it's going to be and that's all there is to it. They say they are supposed to work for the community, well the community didn't have the say so in this. It just popped up," said Mancy Howard, a neighborhood resident, in the Channel 8 report.

It is a grocery store soon to be where only an empty building currently stands however.

The Las Vegas City Council played a role in bringing the grocer to the neighborhood west of downtown. In fact, the food retailer will receive $200,000 from the city as part of package designed to get the grocer to locate a store in the neighborhood.

There's also good economic news for the neighborhood. According to the Channel 8 report, the Las Vegas City Council and the grocer say the store will employ about 150 people, with a preference for all hires being given for neighborhood residents.

Michael Vegas (who asked his last name not be published) tells Fresh & Easy Buzz the issue of bringing a grocery store to the neighborhood has been an ongoing one since the Vons supermarket closed four years ago in 2004. It's been a much-publicized issue in Las Vegas as well over the last four years.

He tells us the city council has been promising to lure a full-service grocery store to the low-income neighborhood over these last four years, without any success until now.

About the Buy Low Market grocery store coming to the Las Vegas "food desert" neighborhood, Councilman Ricky Barlow, who was a key player in getting this deal through, says area residents now have convenience just a couple of blocks away rather than several miles.

For the last four years, residents have been pushing to get a major grocery chain opened on some city land in this area. There were talks about a Food 4 Less opening up, but that deal fell through. For now, residents say they can only hope the new grocery store is everything they wanted, according to the Channel 8 report.

It seems to Fresh & Easy Buzz, locating a store in the underserved, "food desert" Las Vegas neighborhood would have offered a good opportunity for Tesco's Fresh & Easy Neighborhood Market, since the Las Vegas Metropolitan region is one of its current three target markets (besides Southern California and Arizona), along with the fact the grocery chain says locating stores in "food desert" neighborhoods is one of its key strategies.

Tesco currently operates about a dozen of its small-format, convenience-oriented Fresh & Easy grocery stores in the Las Vegas Metro region, and is in the process of converting 10 former Rite Aid drug store buildings into additional Fresh & Easy grocery markets in the region. All of these stores are located in middle income neighborhoods however.

Councilman Ricky Barlow, along with other members of the Las Vegas City Council, say Tesco's Fresh & Easy Neighborhood Market wasn't interested in locating a store in the neighborhood. We wonder why?

Not only would it have made good economic sense for Tesco to do so, after all there's isn't a grocery store in the entire neighborhood, it would offer the grocer an opportunity to make good on its pledge--as well as strategy--of opening Fresh & Easy grocery stores in neighborhoods underserved by food stores offering a selection of basic groceries and fresh foods at reasonable prices.

Since Fresh & Easy wants to become a major food and grocery retailing player in the Las Vegas region--and soon will have over 20 stores in the market--it seems logical to us that locating a store in this "food desert" neighborhood west of downtown would have been a natural for Tesco's Fresh & Easy Neighborhood Market USA. But it appears not to be the case.

Since the city of Las Vegas is giving Buy Low Market (K.V. Mart) $200,000 as an economic incentive to locate a grocery store in the neighborhood, this money would also have been available to Tesco's Fresh & Easy. We're also told the city is offering Buy Low Market additional economic incentives for hiring residents from the neighborhood and giving them training.

Of its current 61 stores open, Tesco's Fresh & Easy has located two in areas that can be defined as "food Deserts"--one in Compton in Southern California and the other in Los Angeles.

The retailer is set to open three stores in neighborhoods currently underserved by grocery stores in Northern California next year--one in Oakland, another in San Francisco's Bayview-Hunter's Point, and the third in Sacramento's Oak Park neighborhood.

However, since the grocery chain already has a solid--and growing--presence in the Las Vegas Metropolitan food and grocery market, we wonder why it didn't take the opportunity to locate a grocery store in the west of downtown "food desert" neighborhood?

It's a moot point now however--but still an interesting question. Channel 8 reports the new Buy Low Market in the renovated Vons supermarket will open towards the end of this year.

Fresh & Easy Buzz is familiar with K.V. Mart's supermarkets and warehouse stores, including those under the Buy Low Market banner. The supermarkets aren't fancy or upscale. However, they offer a solid selection of national brand and private label food and grocery items at good prices. The stores also have strong selections of bulk fresh produce and fresh meats offered at value prices.

The retailer is an ethnic niche marketer as well, so look for it to offer an expanded selection of foods appealing to the minority consumers in the Las Vegas neighborhood as well, if the grocers' current merchandising practices in Southern California are any indication of how it will merchandise the west of downtown store in Las Vegas.

K.V. Mart is a major customer of Unified Grocers, the largest wholesale grocery distributor in the Western U.S. All of its banner stores sell Unified's private label grocery products. Unified also has one of the largest ethnic foods product selections of all grocery wholesalers nationally, which K.V. Mart takes advantage of liberally in its stores.

We expect K. V. Mart, which is a cautious but aggressive multi-store independent operator, to look at opening addition stores in the Las Vegas region--not just under its Buy Low Market banner but also under one of its warehouse store banners--now that's it's entering the market with its first store.

Meanwhile, although there seems to be some anger on the part of some of the neighborhood's residents over the Las Vegas City Council's decision to lure the grocer to the neighborhood, the good news is neighborhood residents will be getting a supermarket operated by an experienced food retailer, which offers a wide-selection of groceries and fresh foods with a emphasis on everyday low-prices and value.

Tesco PLC News: Tesco On the Prowl to Open Stores In India; Nation Has World's Second-Fastest-Growing Economy After China


Tesco in talks with Wadias, Parsvnath to formalise its India plans
28 May, 2008,Writankar Mukherjee & Anuradha Himatsingka, TNN

KOLKATA: After going slow on their ambitious India game plan, UK’s Tesco is once again on the prowl. Europe’s second-largest retailer after France’s Carrefour is in talks with multiple potential partners to formalise its much-awaited India plans.

The international retailer is believed to be in talks with the Wadias, Parsvnath Developers and Kalpataru Properties.

Industry sources, clued on to the developments, claim Tesco is in talks with prospective Indian partners for a joint venture to roll out its cash-and-carry outlets and also enter into a franchise arrangement for front-end retail.

Though early days, sources said Tesco’s India business model may be along the lines of the Bharti-Wal-Mart alliance. Incidentally, Tesco was also negotiating with Bharti though the deal fell through midstream when Bharti teamed up with the iconic US retailer.

When contacted by ET, none of the players were willing to part with any information on the proposed deal. In response to ET’s email query, a Tesco spokesperson said: “We have made no secret of our interest in the Indian market and believe it could represent an exciting opportunity for the future. We continue to discuss potential partnerships. However, it is important to get the right partner and when we have anything more to say on this we will announce it.”

Parsvnath Developers chairman Pradeep Jain said: “We are talking to global retailers and hope to finalise our retail venture over the next two-to-four weeks.” Mr Jain refused to disclose the names of the global retail chains it is negotiating with.

A Wadia Group spokesperson said: “We do not respond to speculation. We have no comment to make on your query.” Mumbai-based realty firm Kalpataru Properties spokesperson too refused to comment.

While India allows 100% FDI in cash-and-carry retail, it allows up to 51% in single-brand front-end retail. Since FDI is not yet permitted in multi-brand front-end retail, players like Tesco can enter front-end retail only by entering into a franchise arrangement with an Indian partner.

Retailers are seeking partnership opportunities with Parsvnath Developers and DLF. Tesco has sourcing offices in Bangalore and Delhi. They source products from India for its global operations. The UK retailer also operates a global support centre in Bangalore — Tesco Hindustan Service Centre — which provides IT and business services to Tesco operations in Europe and Asia.

Tuesday, May 27, 2008

Building 'Critical Mass' in a New Neighborhood: Tesco to Open First Fresh & Easy Store in Oxnard in Ventura County

Tesco plans to open its first Fresh & Easy Neighborhood Market grocery store in the Ventura County Southern California central coast city of Oxnard, Fresh & Easy Buzz has learned.

Fresh & Easy Neighborhood Market, Inc., as Tesco does business in the USA, has applied for an off-sale beer and wine license with the California Department of Alcohol Beverage Control for a new store it plans to open on Channel Island Blvd. and Rose Avenue in Oxnard.

Oxnard is located in the central coast region of Southern California in Ventura County. Oxnard is the county's largest city with a population of about 200,000, according to the most recent data from the California Department of Finance. The Oxnard Metropolitan region has a population of about 800,000 residents.

Besides being the first Fresh & Easy store in Ventura County and in Oxnard, the significance of the location in the bigger scheme of things is that the new store in Oxnard, which likely will open next year, is Tesco's second planned for the central coast region.

As we reported here on May 2, Tesco applied for an off-sale beer and wine license for its first store in the general region, in Lompoc, California, recently. Lompoc, which is about 79 miles from Oxnard, is in the neighboring county of Santa Barbara.

Although both Lompoc (Santa Barbara County) and Oxnard (Ventura County) are in Southern California where Tesco already has about half of its 61 small-format, convenience-oriented Fresh & Easy stores open and operating, the region is a distinct food and grocery sales market from Los Angeles and Orange County, where the nearest Fresh & Easy grocery markets currently are located.

Ventura and Santa Barbara counties also have some geographic and economic distinctions vis-a-vis Los Angeles and Orange County.

For example, agriculture is still a main source of income and employment in both counties; more so in Ventura than in Santa Barbara County though.

Ventura County remains today one of the state's top strawberry-producing regions, for example, despite increasing urbanization in the region. The area in and around Oxnard is regularly the state's number one or two top strawberry crop producer, according to the California Department of Agriculture. The city holds the California Strawberry Festival each year to celebrate its famous crop.

Even though the two neighboring counties (Ventura and Santa Barbara) have experienced rapid urbanization over the last couple decades, they obviously are far more rural, due in part because of their geography and topography, than Los Angeles and Orange County, which are essentially one continuous urbanized region. The Simi Valley gateway area where Fresh & Easy stores are located isn't too far away either. It's "all in the neighborhood" in Southern California geographical terms.

Fertile Ventura county also is a major bean producer (especially Lima beans), as well as a source of various other fresh market crops.

Oxnard also is home to Port Hueneme, one of California's busiest commercial ports. The city was founded in 1903.

As we write often in Fresh & Easy Buzz, Tesco's retail store location strategy with its combination basic grocery and fresh, prepared foods-oriented Fresh & Easy grocery stores, is what we term a "critical mass" strategy. In other words, the retailer's strategy is to open the small-format grocery markets close to each other (about 2 miles apart eventually) in its target market regions, thereby creating a "critical mass," hopefully allowing the grocer to eventually become the "natural choice" for shoppers as their "neighborhood grocery store of choice.

Although Lompoc and Oxnard are nearly 80 miles apart, both cities anchor different parts of the central coast region, which makes sense as Tesco will likely fill in "the middle" with additional Fresh & Easy stores in other key cities in both counties, along with adding more stores in both cities.

The map above depicts graphically what we mean by the progression or march from other parts of Southern California to the coastal cities of Lompoc and Oxnard, and surrounding region.

The Oxnard and Lompoc stores also are significant in that they demonstrate Tesco's progression or March throughout Southern California.

The first Fresh & Easy grocery markets were opened last year (beginning in late October/early November) in the Southern California desert region. Other stores were opened on the heels of those first stores in the San Diego region, Orange County, the San Fernando Valley and Los Angeles. Tesco continues to open new stores in those regions.

Therefore, opening stores in the cities of Lompoc and Oxnard(with more to come per the "critical mass" strategy) and in other cities in Santa Barbara and Ventura counties, follows the grocer's strategy of filling out the entire geographical and market region parts of Southern California. Tesco will then focus on opening more additional stores in the region like it's doing in all of its other Southern California markets.

Ventura County has a relatively young population, with 68% of the city's residents under 45, and 38% under 24 years old, according to the California Department of Finance. About half the county's population is minority, with Hispanics or Latino's being the majority of those ethnic minorities represented: Hispanics, African Americans and Asians.

The remaining 45% of the population is classified as white, according to the California Department of Finance, with 5% classified as "other."

Oxnard's city motto: "The city that cares."

That's a warm welcome for any new food and grocery retailer.

What Others Are Saying: 'Central Valley Business Times': California's Farmers' Markets Are Booming on 'Buy Local' Trend

May 27, 2008

Farmers markets in California are increasing in popularity. Coordinators say there has been a big jump in consumer numbers in the last 18 months, as more people decide to buy food locally.

“We’re seeing an influx of new consumers coming to our markets. Even in May, we’re doing mid-August numbers in terms of customers,” says Dan Best, coordinator of the certified farmers markets of Sacramento. “I think it’s largely because of the ‘buy local’ concept. It used to be organic. Now, local trumps organic.”

In addition, more people would like to know who grows the food they eat, and they want it as fresh as it can be, Mr. Best says.

Farmers like the markets as it provides them the cash flow to keep their businesses operating.

“It’s kind of a rough way to try to sell your crop but yet it’s cash money and it’s right now, there’s no waiting for it. So a lot of growers have found it’s a good way to make their farm viable,” says Mr. Best.

The problem now is finding new locations with space for new markets.

Upcoming New Markets Special Report: Raley's Increasing 'Local Foods' Efforts in Sacramento and Northern California Market Regions

Sacramento, California-based family-owned regional supermarket retailing powerhouse Raley's is expanding it's already aggressive local foods merchandising and marketing programs in a number of ways, clearly visible in its stores and in it's multi-media advertising.

Among the increased local foods merchandising and marketing efforts the 129 store regional supermarket chain is making include:

>Labeling all foods grown or produced within a few hundred miles from its Sacramento, California base with eye-catching "locally-grown" and "locally-produced" shelf signs. This includes fresh produce, meats, perishables and dry grocery items, including natural, organic and specialty foods offerings.

>Labeling foods grown and produced in California, but farther than a few hundred miles away from its Sacramento base, with "Grown in California" shelf signage.

>Increasing the number of exclusive deals it signs with local farmers, buying the local growers' entire fresh produce crops, and touting the locally-grown fresh fruits and vegetables by building massive displays in store produce departments, running large front page ads for the local items in the retailer's weekly newspaper advertising circular, and often running full-page color ads in the major daily newspapers in the grocer's market regions featuring such local produce such as corn on the cob, strawberries, melons and other fruits and vegetables grown by local farmers.

Raley's contracts for the entire crop of a given grower (which can be expensive), which are grown by top-quality farmers, because locally-grown produce is now so popular in California that it gives the retailer a major competitive advantage to do so. It touts not only the local aspect of the fresh produce items, but the exclusivity to Raley's as well.

>Working closer with local natural, organic and specialty foods' producers and vendors by authorizing their local food and grocery products in the stores, promoting the local items more extensively, and partnering with the local producers at special events like community food fairs and charitable events designed to increase awareness and sales of locally-grown and produced food products.

>Creating more "local foods" in-store displays and cross merchandising the local items both by meal complementary merchandising techniques and by local region.

>Offering locally-grown fresh produce at reasonable prices rather than doing what some food retailers do and selling them for a premium.

>Conducting more frequent in-store local foods sampling events, often having numerous local foods producers, including farmers, do the tastings in the stores at the same time.
Raley's, which is the food and grocery sales market share leader in the Sacramento region market, and has stores under the Raley's, Bel-Air Markets, Nob Hill Foods and Food Source banners elsewhere in Central and San Joaquin Valley, north of Sacramento, in the San Francisco Bay Area and in Nevada, has long positioned itself--and is--as the local grocer, even though the chain has grown to 129 stores and nearly $4 billion in annual sales.

Along with its extensive--and increased--local foods merchandising and marketing commitment, the supermarket chain has a charitable foundation that gives millions of dollars to charities in Sacramento and the other Northern California regions where it operates stores.

In addition to the foundation, the corporation itself donates millions of dollars in cash and in-kind food donations to non-profit groups, charitable organizations and food banks and pantries throughout Northern California and Nevada.

The grocer also has a program in which customers can select a card in either $5, $10, or $20 amounts at each checkout lane as a way to make a donation to local food banks. Shoppers select the card while waiting to get checked out, give it to the store clerk as she rings up their purchases, the clerk scans the card, and the amount goes into a special account, 100% of which is donated to programs to feed the hungry. Raley's matches a portion of the total funds donated by customers each year.

Raley's also funded Sacramento's fairly new state-of-the-art baseball stadium for the city's super-popular Sacramento Rivercats minor league baseball team. The baseball stadium, called Raley Field, is packed every night during the season with families who as far as they are concerned believe the local minor league team is every bit as enjoyable to watch as a major league baseball team is.

Raley's runs all sorts of promotions in conjunction with the team and stadium. The grocer also gives out hundreds of tickets during the season to lower income families and children. To say the River Cats are a hot ticket is the understatement of baseball season. They draw more fans on many nights than a lot of major league baseball teams in parts of the U.S. do.

Raley's was a first-mover in California and national food retailing in terms of getting into local foods merchandising and marketing in a serious and major way. The added efforts and programs started by the grocer a few months ago and increasing even more recently are positioning the chain as one of the foremost local foods food retailers in the U.S.

It's paying dividends for the supermarket chain as well; that's why Raley's continues to add more elements and aspects to its local foods program.

Others like Safeway Stores, Inc. Whole Foods Market, and numerous regional chains, multi-store independents, single-store independent grocers and natural foods retailers also are into local foods merchandising in a big way in California.

In fact, those few food retailers who aren't "going local" are really at a big disadvantage, as most grocers and California market observers will tell you the local foods movement is growing much faster than the organic foods movement is in the Golden State.

In part that's because the organic foods movement is more mature, and still is growing considerably. But that's really only a small part of the equation. the major reasons the "buy local" is growing faster than the organic consumer movement right now in California is because it hits on so many hot buttons important to the state's consumers. These include freshness of product, price, environmental concerns, food safety concerns, desire to support local agriculture, and many more.

Raley's own research identified this growing movement some time ago, and that along with the best indicator, sales of locally-grown and produced food products in the grocers stores, is encouraging the family-owned supermarket chain to grow its local foods merchandising and marketing programs even more.

Monday, May 26, 2008

Memorial Day 2008 in the USA: We Salute Those Currently Serving and Those Who Have Served

Some thoughts from America's founders on this day of remembrance:

1. "Those who would give up essential liberty to purchase a little temporary safety deserve neither liberty nor safety." ~ Benjamin Franklin

2. "Discipline is the soul of an army. It makes small numbers formidable; procures success to the weak, and esteem to all." ~ George Washington

3. "Can the liberties of a nation be thought secure when we have removed their only firm basis, a conviction in the minds of the people that these liberties are of the gift of God? That they are not to be violated but with His wrath?" ~ Thomas Jefferson

4. "Constitutions should consist only of general provisions; the reason is that they must necessarily be permanent, and that they cannot calculate for the possible change of things." ~ Alexander Hamilton

5. "I must study politics and war that my sons may have liberty to study mathematics and philosophy. My sons ought to study mathematics and philosophy, geography, natural history, naval architecture, navigation, commerce, and agriculture, in order to give their children a right to study painting, poetry, music, architecture, statuary, tapestry, and porcelain." ~ John Adams

6. "A well regulated militia, composed of the body of the people, trained in arms, is the best most natural defense of a free country." ~ James Madison

7. "Arms discourage and keep the invader and plunderer in awe, and preserve order in the world as well as property... Horrid mischief would ensue were the law-abiding deprived of the use of them." ~ Thomas Paine

8. "Our obligations to our country never cease but with our lives." ~ John Adams

9. "How soon we forget history... Government is not reason. Government is not eloquence. It is force. And, like fire, it is a dangerous servant and a fearful master." ~ George Washington

10. "When my country, into which I had just set my foot, was set on fire about my ears, it was time to stir. It was time for every man to stir." ~ Thomas Paine

Some thoughts from America's veterans on this day of remembrance:

>Click here to read what Memorial Day means to veterans in their own voices.

>The Last Doughboy: At 107 years old, Mr. Frank Buckles is the last of America's World War I veterans. Click here to read a Memorial Day column by George Will.

All the great things are simple, and many can be expressed in a single word: freedom, justice, honor, duty, mercy, hope. — Sir Winston Churchill

Saturday, May 24, 2008

Upcoming New Markets Special Report: The Changing 'Face' of Retailing in Bakersfield, California

Fresh & Easy Buzz Editor's Note: Fresh & Easy Buzz has been chronicling and writing about the new markets Tesco plans to move into soon with its small-format, convenience-oriented Fresh & Easy combination everyday low-price basic grocery and fresh foods stores.

Currently, Tesco operates 61 Fresh & Easy Neighborhood Market grocery stores--which average about 10,000 -to- 13,000 square feet--in Southern California, the Phoenix Metropolitan/ East and West Valley regions in Arizona, and in the Las Vegas, Nevada Metro area.

Thus far, we've reported Tesco's plans to move into the California Markets of Santa Barbara-Lompoc-Oxnard--which is still in Southern California but distinct from its current Fresh & Easy store locations which range from San Diego in the south, to Los Angeles--Bakersfield and Fresno in the southern Central Valley, Modesto in the northern San Joaquin Valley, and Sacramento and the San Francisco Bay Area in Northern California.

We've also reported Tesco will open a Northern California distribution center in Stockton, which is about 30 miles north of Modesto, about 40 miles from Sacramento, and about 70 miles from San Francisco, to serve its Central Valley and Northern California stores.

For a chronology of the reports, stories and analysis Fresh & Easy Buzz has written on Tesco's long but rapid march from Southern California north, you can view the piece here.

This piece, "Fresh But Never Easy: Tesco's Long But Rapid South-North March in the Nation-State of California," has links on it to Fresh & Easy Buzz stories and analysis on each of the cities/market regions mentioned above. Just look at the bottom of the story linked here.

We also reported here yesterday, Tesco plans to open its first Fresh & Easy grocery store in the northern Nevada city of Sparks, which is next door to Reno. When this store opens next year it also will mark the retailers beginnings of its Nevada march, from the Las Vegas Metropolitan region in southern Nevada, where it currently operates about 12 stores and plans to open 10 more, north into the Reno-Sparks Metro region.

Tesco will most likely open the first of its Central Valley and Northern California stores--five in Bakersfield and Fresno respectively, one in Modesto, 19 in the Sacramento Metro region, and 18 in the San Francisco Bay Area thus far--starting early next year. It is possible a few of the stores could open by the end of this year, but early 2009 is most likely the case.

Fresh & Easy Buzz 'Upcoming New Markets Special Report' series

As part of Tesco's entry into these new market regions, which is less than a year away, Fresh & Easy Buzz is starting a series called "Upcoming New Markets Special Report." In it, we will write/feature original pieces about these new California and Nevada markets (as well as others that are added between now and next year), as well as publishing pieces and articles written by others which we find of interest to our readers.

The "Upcoming New Markets Special Report" series will be an ongoing occasional series. We will write and publish pieces about these markets occasionally for the rest of the year, but at no set schedule. In other words, if we read a story from a publication we think would be of interest to Fresh & Easy Buzz readers, we will publish it.

In terms of original pieces, which will comprise the majority of the "Upcoming New Markets Special Report" series' content, we will offer reports, articles and analysis from time-to-time as issues, ideas and developments warrant in our editorial judgement.

Every piece, either written by Fresh & Easy Buzz team members or from other publications, will be designated with the preface: "Upcoming New Markets Special Report" like this piece from the Bakersfield Californian about the Bakersfield California emerging retail market is. Think of it as a brand or banner. Whenever you see the header: "Upcoming New Markets Special Report," you will know what's coming.

Bakersfield California Market

Speaking of the Bakersfield California retail market, as we mentioned above Tesco plans to open five Fresh & Easy grocery stores in the city of Bakersfield and surrounding communities most likely early next year.

Located in California's southern Central Valley, Bakersfield in many ways has more in common with the Midwestern U.S. than it does with Southern California, and certainly than it does with Northern California.

The region's economy has historically been dominated by farming and agribusiness, which remains the area top economic engine still today.

Bakersfield also has a long history as an oil-producing region in the U.S., although today oil production in Kern County, the county Bakersfield and the surrounding cities are in, is a mere shell of what it once was.

The Bakersfield Metropolitan region in the last decade however has started looking much more like Southern California, and even looking closer to Northern California, in its more mixed economy--lots of professional services, health care, retail, technology--in which agriculture is now joined by a host of other industries and employers.

Part of this changing face of Bakersfield can be reflected in the growing number of national retailers that have come to the city over the last fer years--and the many more that plan on coming.

Upscale retailers like Gap, and Williams-Sonoma have opened stores in Bakersfield recently. Others like Target, women's upscale clothing store Bebe and more will be joining Tesco's Fresh & Easy Neighborhood Market in the city and region soon.

Further, the city of Bakersfield has a number of upscale retail developments in the works which will bring even more new, and more upscale and specialty, retailers to the city.

Staff writer Jenny Shearer has an interesting article, "Just how do national retailers decide to come here," in yesterday's Bakersfield Californian newspaper, which is the region's number one daily.

The piece offers an interesting look at the changing face of retail in Bakersfield, along with the demographic changes retailers like Fresh & Easy and others will find in the city and region when they turn the keys in the doors of their first stores in the area.

The focus of the story isn't on food retailing. However, its equally illustrated of the changing face of retailing in the Bakersfield region, as well as the changing consumer demographics of the market area.

Consumer Research: A Positive Method of Reporting On Consumer Surveys and Other Types of Industry Primary and Secondary Research

On Tuesday, May 20, we published this piece, "Take One Dose of Internal Research, Add An 'Independent Survey' From an Unnamed Source, and You Get A Consumer Preference For Self-Service Checkout."

You can read our May 20 piece yourself here, but essentially we reported on the fact a story in a British food industry trade publication reported that internal research given to it by Tesco's Fresh & Easy Neighborhood Market USA, along with what the publication called an "independent survey," shows a growing consumer preference for Self-Service checkout in grocery stores in the U.S.

The problem with the "independent survey" reference is the publication didn't say who did the survey--the person, business or organization--and reported nothing about said "independent survey," such as not only who conducted it, but what it said in percentages, it's methodology or other minor details.

Yesterday, the U.S. grocery industry trade publication Progressive Grocer published this brief report about a survey by the respected research firm Packaged facts on self service technology, such as vending kiosks, self-service checkout stands and other related consumer do-it-yourself technology in America's retail stores and foodservice outlets.

Even though the Progressive Grocer report was brief, the publication managed not only to site the source of the survey--Packaged Facts--but also to report in brief on its findings using the quantitative data from the research study summary.

Additionally, Progressive Grocer included a link at the end of its report to the Packaged Facts' website, where good consumers of research can then go and read an abstract of the research on retail self-service technology conducted by the firm.

The study summary or abstract on the Packaged Facts site explains what the study looked at: self -service kiosks, vending machines, self-checkout applications and other technology in the retail and foodservice spaces. That's important since if one doesn't know the research looked at far more than just self-service checkout the results could be interpreted much differently, for example.

The abstract/summary on the website also offers the methodology of the study, which it says was a combination of primary and secondary research, and elaborates on it a bit, along with other aspects of how the research was conducted.

Packaged Facts is in the business of selling its research, and we have no problem with that. The research firm makes copies of its full studies available to the media if a given publication wants to write about a given study. The firm also makes researchers available to answer any questions a writer or analysts might have in the process of writing his or her piece on the study.

The way Progressive Grocer included data in its brief piece on the survey, along with not drawing any conclusions either pro or con about self-service technology, is the proper way to report research data.

If Progressive Grocer chose to write a longer, more detailed piece on the study, including making conclusions, that would be fine because the publication is fully-disclosing who conducted the study and what the study says--data, percentages, methodology and the like--which the publication would elaborate on in a longer piece.

It's a separate question as to if one agrees or not with those potential conclusions based on the mix of primary and secondary research done in such a study, but that's the case with every study conducted by every person or firm who has conducted one.

The important point is Progressive Grocer offered a link to a place (the Packaged Facts website) where a good consumer of research can go to read more about the study, not to mention the publication actually sited who conducted the research, which is the norm in reporting research of any kind.

[As consumers of research, if you read a piece in which an "independent survey" is quoted either to support or not support a particular technology or practice (or just in general), and the name of who conducted the "independent survey" isn't listed, let the red flags fly at full mast as you continue reading on in the story.]

Further, as a reputable research firm, Packaged Facts posts a summary of its research, including a description of the methodology, on its website so good consumers of research can be informed.

Of course, doing so also is an advertisement for people to purchase the study, as you can see on the link, but we have no problem with that. That's the business the company is in, after all. Additionally, Packaged Facts makes such studies available to the media to write about as we mentioned earlier.

We wanted to publish this piece as a follow-up to our May 20 story, as its an example of the proper way to report on research, along with showing how reputable research firms make available summaries of their study's online for good consumers of research to view.

Related Reading From Fresh & Easy Buzz:

Tuesday, May 13: "'America's Next Cult Retailer': Three Big Questions For Execution Research Limited About its Interview Study of Tesco's Fresh & Easy Store Customers." Click here to read the story

Friday, May 23, 2008

Friday Frolic--British Foods in the USA: Who Says it's Difficult to Find British Foods in the Western USA Market Region? Your Guide is Here

On May 11, we published this piece about Tesco's Fresh & Easy Neighborhood Market adding 250 new items to its 61 small-format, convenience-oriented grocery stores currently operating in Southern California, Arizona and Nevada, including that the grocer plans to add a number of authentic British food and grocery products in the stores.

In part, the adding of the 250 new items, including the British food and grocery items, is in response to consumers saying they want more product variety in the stores, along with customers (and expats) who said they can't find many British food items in California, Arizona and Nevada stores.

The fact is, there are numerous supermarkets, online grocers and British foods stores that sell a wide-variety of British-made food and grocery products, along with foods from other parts of the United Kingdom like Ireland, in California, the Phoenix, Arizona Metropolitan and East-West Valley regions, and the Las Vegas Metro area, where Fresh & Easy's 61 stores are located.

For example, in Southern California, the upscale supermarket chain Bristol Farms (which is now owned by SuperValu, Inc., offers a fairly good selection of British food and grocery products, as well as many produced in Ireland and elsewhere in the UK.

Another multi-store upscale chain, Gelsons, also has decent selections of British foods in most of its stores.

Additionally, Safeway-owned Von's Pavillions, the retailer's upscale food store banner with locations throughout Southern California, sells made-in-Britian food and grocery products in its stores. Some stores have better selections of the UK-produced food and grocery items than others, it all depends on the location and size of the store.

An independent specialty supermarket, Vincente Foods in Brentwood near Los Angeles, also sells a strong selection of British food and grocery products.

Bristol Farms is a major retail participate in the once a year 'Foods From Britain' promotion held by the Foods From Britain trade group in the U.S. These events are designed to showcase British foods and include expanded selections of British food and grocery items in the stores, food tastings, special events and other promotional activities sponsored by the the UK trade group in the U.S. and the participating stores.

Macy's Department stores throughout California also sell selections of British-produced food and grocery products in its "The Cellar" specialty foods departments. They even hold a once a year British Foods promotion in which they bring in additional items from the UK, as well as hold promotions and tastings of British food products, offer drawings for trips to the Uk and other related promotional activities.

Cost Plus World Market, which is headquartered in Oakland in Northern California, and has stores in California, Arizona, Nevada and most other states in the U.S., also carries British Food and grocery items, including lots of confections, teas and other products.

There's even a British Foods online specialty store based in Southern California called British Expat Shop. Not only can you buy British foods from their website and have the goods delivered to your door, the online store also offers various British-made non-foods items as well. View the Expat Shop website here.

For consumers located anywhere in the U.S.--including California, Arizona and Nevada where Fresh & Easy stores are located--who want a huge selection of British foods and related goods without even leaving their computer, there's The online British grocer carries a huge inventory of made in the UK items, from common favorites to specialty niche items. Delivery is anywhere in the USA. View the British Home Market online store here.

Members of the Fresh & Easy Buzz team have ordered from the British Home Market online store before, and say the service and delivery went off without a hitch.

There also are numerous other online British grocery stores that deliver. These include: Jollygrub, the British Corner Shop, British Delights USA, My English Pantry and a number of others.
There also are a number of independent British foods stores in Southern California.

One popular British specialty store is the British Food Shop at 27601 Forbes Road #19 in Laguna Nigel, in Orange County. As you can see by viewing the store's website here, it offers a wide variety of British Foods, along with tea pots, gifts and other goodies from the UK.

The city of Santa Monica, just a few miles west of Los Angeles, has two British Foods specialty stores, Yeo Old Kings Head and The Continental Shop. In addition to a huge selection of British food and grocery items, The Continental Shop sells all things British: non-foods, tea pots, books and gifts. It even has a British travel service.

In the Southern California Desert region--Palm Springs, Palm Desert, Indio, La Quinta and other cities nearby--the multi-store upscale Jensens' Fine Foods specialty grocery stores offer numerous British food and grocery items, along with Irish foods and other international groceries.

There are even more British Foods specialty shops in Southern California that offer strong selections of foods, drinks and non-foods items from the UK. For a list of a number of other British Foods specialty stores in Southern California click here

Northern California

Just like Southern California, Northern California has numerous supermarkets and specialty stores which sell a wide-variety of British food products.

In the San Francisco Bay Area, upscale, multi-store independent grocer Mollie Stones sells lots of UK-produced foods in its stores. Some of the grocer's larger specialty supermarkets even have full sections dedicated to foods from Britain and other parts of the UK.

Another multi-store upscale independent in the Bay Area, Andronico's Markets, also sells a decent selection of British food and grocery products, although it's stores' selection isn't as good as Mollie Stone's is in the category.

Lunardi's, another multi-store upscale independent also merchandises numerous British food and grocery products in its stores, which are located throughout the Bay Area. Draeger's, with three gourmet supermarkets in the region also stocks a wide variety of British foods, as does indpendent Cal Mart in San Francisco, and two-store Cosentino's in the San Jose region.

And, of course, the Cost Plus World Market stores, which are numerous in Northern California, offer British foods, often more than in other parts of the U.S because of the region's demographics and higher than U.S. average British and Irish expat population.

Northern California also is home to numerous specialty stores which sell nothing but foods from Britain and other parts of the UK.

One of those stores is the very popular San Francisco British Foods store called, "You Say Tomato." The store's welcoming sign is pictured at left.

For a peek at what San Francisco's "You Say Tomato" British foods store offers take a look here. Also view the store's website here.

"You Say Tomato," located in the city's Polk Street Neighborhood, is owned by a British expat named David Kidd. The store sells lots of British foods, including dry grocery, refrigerated and frozen, plus other goodies. By the way, if you go in the store and pronounce tomato (toe-mah-toe) rather than (toe-ma-toe), don't be surprised if its owner gives you a taste of something from his homeland for free.

Other British foods stores in the San Francisco Bay Area include: British American Imports, in San Francisco; British Food Center, in Campbell near San Jose; British Grocery Shop, in the East Bay Area city of Pleasanton; and a number of others. For the addresses, phone numbers and websites of the above mentioned British food stores, along with a number of others, click here.

Whole Foods Market, Inc. in California, Arizona and Nevada also carries a number of UK-produced natural, organic and specialty foods items, such as Prince Charles' own Duchy Originals organic foods line. Many of the Northern California Whole Foods stores have larger selections than those in other parts of the U.S.


British foods can be found in Arizona as well.

A.J's Fine Foods, an upscale specialty grocery chain owned by Bashas, offers a fairly decent selection of British food products, along with other food and grocery items from the UK, such as Irish goods. AJ's has over a dozen stores, mostly located in the Phoenix-Scottsdale Metropolitan region.

Speaking of Scottsdale, there's a British Foods specialty store, British Gourmet, at 7901 E. Thomas Road #105, in the Arizona city which runs right into Phoenix. British Gourmet offers a solid selection of British food, grocery and non-foods products.

Another popular British Foods store in Arizona, which also offers authentic British prepared foods and teas to eat and drink on the premises, is the Tudor Rose in Tucson. It's at 2029 South Craycroft in the city.

Of course, the Cost Plus World Market stores in Arizona sell British foods, as the stores in California do.

Whole Foods' stores in the Phoenix Metro region also offer some natural, organic and specialty foods items from the UK, as mentioned earlier. Trader Joe's stores do as well.

And, of course, Fresh & Easy Neighborhood Market is in the process of adding British foods items to its stores in Arizona, along with in California and Nevada, so that will be another venue for British food and grocery items--among the many you now know are out there.

Las Vegas, Nevada

The Las Vegas Metro region has a number of stores which also offer a wide variety of foods from Britain.

Among these stores include: European Specialty Foods, 3711 Industrial Road in Las Vegas; British Foods Incorporated, 3375 South Decatour Blvd. #11, Las Vegas (this store offers a huge selection of British food and grocery products, along with lots of British non-foods items); Taste Specialty Food, 3945 W. Reno Avenue #E, Las Vegas; International Market, 5000 South Decatour Blvd, Las Vegas, and Watkins Foods & Specialty Items, also in Las Vegas (702) 324-3758.

Cost Plus World Market, some Vons supermarkets and the Whole Foods store in Las Vegas also offer assorted British food and grocery items.

The Special Relationship

As British Prime Ministers and American Presidents from Churchill and FDR and Thatcher and Reagan, to Bush and Brown, have all said, the U.S. and Great Britain have that "special relationship."

That special relationship extends to British-produced food and grocery products being available at numerous food stores in the United States, ranging from upscale and specialty supermarkets and online sites like those we've pointed out., to the independent British food stores we've listed, along with many others not listed.

There are plenty of stores in the Western U.S. states of California, Arizona and Nevada offering British food, grocery and even non-food products and goods for sale, as you can see from reading this piece. And what can't be found in those stores, which isn't much, can be ordered online from the various websites we've described in this story, along with many others we didn't even list for space reasons.

Further, if and when Tesco's Fresh & Easy Neighborhood market goes through with adding its additional British food and grocery items, that will add numerous other stores to the long list of brick-and mortar and online stores we've described, where Western USA consumers living in California, Arizona and Nevada can buy made-in-Britain foods and other goods.

The selling of British food and grocery products in the USA, including in California, Arizona and Nevada, is far from an un-mined niche.

We've listed about one-third of the various venues where British foods are available. The British specialty foods stores and general supermarkets we list in this piece however are the best stores in each of the regions in terms of the selections of British food and grocery products available.

About the only British food item you probably won't be able to find in the various combined stores described in this story is a good, top-quality Spotted Dick. But then, word is that's even hard to find these days in Britain. However, you can buy Heinz made-in-the-UK brand Spotted Dick in many of the stores outlined in this piece.

Thursday, May 22, 2008

New Regions New Markets: Tesco Will Open its First Fresh & Easy in Northern Nevada's Reno-Sparks Area

Tesco is coming to Sparks, Nevada in the northern part of the state, and will open a Fresh & Easy Neighborhood market grocery store, its first in the Reno-Sparks area, in the Silver State Plaza, a shopping center at Prater Way and McCarren Blvd., according to Dale Gillaspy, a city official with the Sparks Building Department.

The confirmation Tesco will open a Fresh & Easy grocery market in the shopping center by Mr. Gillaspry was reported in a small item in the Reno Gazette Journal newspaper and emailed to Fresh & Easy Buzz by a loyal reader in Reno, Nevada.

Sparks and Reno are bedroom communities in Northern Nevada and form a Metropolitan region.

Gillaspy also told the Reno Gazette Journal a new Office Supply big box store would be joining Fresh & Easy in the Silver State Plaza shopping center.

Fresh & Easy Buzz has known for sometime Tesco would locate some of its small-format, convenience-oriented Fresh & Easy grocery markets in the Reno-Sparks Metropolitan area for a couple of reasons.

First, the Las Vegas region in the southern part of the state is one of Tesco's three initial target markets for the combination basic grocery and fresh foods' format Fresh & Easy Neighborhood Market grocery chain. As such, logic dictates they would locate stores in the northern part of the state, since nearly all of Nevada's population is split between southern and northern Nevada, with very little in the middle.

Second, when we were one of the first to report last year Tesco would open 19 Fresh & Easy grocery stores in the Scaramento Metropolitan region in Northern California, our sources told us there were plans to open stores in the Reno-Sparks area as well. In terms of the retail grocery business, northern Nevada and the Sacramento region are part of the same market for statistical and market share purposes.

Additionally, when Tesco's Fresh & Easy Neighborhood Market announced/confirmed it would open the 19 stores in the Sacramento region some months after we first reported it, it made obvious the fact--in addition to Nevada being on of the grocer's three key markets--that the retailer would eventually start inking store site leases in northern Nevada.

We heard rumors about possible locations in Reno and Sparks over the last couple months, but since we didn't have confirmation we didn't write about it. The confirmation from Mr. Gillaspry is the first for a Reno-Sparks area store. Good work by the Reno Gazette Journal's "The Official Answer" columnist, which is the section of the paper where the item was ran.

Lastly, as we often discuss on Fresh & Easy Buzz, Tesco's store location strategy with its Fresh & Easy chain is what we call a "critical mass" store location strategy, meaning when you see the retailer planning to open stores in a given new region, such as the Sacramento market, the probability it will also go into neighboring markets like the Reno, Nevada Metro area is very high.

We are being told Tesco has at least two other locations currently in negotiation in the Reno-Sparks region of northern Nevada. However, until we get further confirmation we won't report those potential locations, as per our policy.

Interestingly, the item in the Reno Gazette Journal refers to Tesco's Fresh & Easy as a health food market, rather than what it is, a combination basic grocery and fresh foods store with an emphasis on everyday low prices.

We bring this up not to fault whomever wrote the item at the paper, there's no reason they should know exactly what type of grocery store Fresh & Easy is. Rather, we mention it because it just shows the perception problem the retailer has regarding its stores and how its been positioning(or not positioning) them, as we've written about a number of times.

As we've mentioned, in interviews with a couple hundred Fresh & Easy customers at and outside stores over the last five months, along with reading hundreds of online message board posts about Fresh & Easy, we've been told for example by the customers that before they went into one of the stores they thought they were gourmet food stores, British foods stores, natural or health food stores; nearly everything but what the Fresh & Easy stores actually are, as we described them above, which is essentially how Tesco wants them to be perceived.

And on the message boards, you can read comments by consumers who've yet to go into one of the stores thinking (and writing) the same things; suggesting Fresh & Easy stores are just like Trader Joe's (which they aren't although they have a number of similarities), British foods stores, stores that sell only prepared foods and other format misperceptions.

Much of this is due to a lack of clear format positioning by Tesco, which we believe has been part of the reason the stores aren't generating as much new consumer-shopper trial as they could.

It's also do in-part frankly to the hybrid nature of the Fresh & Easy stores. They are one-part small-format discount basic grocery store, one-part semi-upscale fresh foods markets and one-part organic and specialty food and wine store.

From a marketing standpoint, a hybrid retail format like Fresh & Easy is much more difficult to position in terms of marketing than say the small-format (SuperValu, Inc.) Sav-A-Lot chain, which is simple: A limited assortment of food and grocery products at the lowest possible prices; or Trader Joes: A specialty grocery store with domestic and imported private label specialty, natural and organic foods at low prices.

Making a one sentence positioning statement out of the Fresh & Easy format is a bit harder, so we can appreciate Tesco's struggle in that regard. One can create that one sentence positioning statement; we have. But the problem is it isn't simple, clean and short like those above for Sav-A-Lot and Trader Joe's. The cleaner and simpler a positioning statement, the easier it is to communicate and the better that communication is received by consumers.

This is because the Fresh & Easy format is a bit more complex and frankly a bit more muddled. That's not to say it's worse or better. But from a market positioning resultant communications campaign standpoint it poses more difficulties. In our analysis Tesco hasn't met that challenge yet. In fact, it hasn't come close to doing so.

If so, the consumer confusion--which by the way was in many ways created by Tesco's "British grocer comes to America" PR blitz for a year before the first stores even opened--wouldn't be so widespread as it is out there in Consumerland.

Tesco can do it, but the retailer needs to create a strategy, stick to it, and communicate it using more than press releases. It needs to create a positioning message and then control it by using paid advertising along with the PR campaign.

When a retailer has an identity problem--which we believe Fresh & Easy does have based on our analysis--it needs to control a major part of its own message by using advertising, be it radio, print, TV or a combination of all three. We suggest a combination of radio and selective print, as we've discussed in previous pieces on the blog.

In the meantime, locating stores in Reno-Sparks is a natural progression for Tesco, from Las Vegas, north to Nevada (the stae's two population centers), as well as being part of its long but rapid march from Southern California to Northern California (Sacramento and Reno-Sparks being in the same food retailing market).

Remember "critical mass." It means there will be more Fresh & Easy grocery stores to come in the Reno-Sparks area.