Wednesday, May 7, 2008

Fresh & Easy Neighborhood Market's fresh & easy Store Brand Organics Beat Safeway's O' Organics Brand in Price Comparison


As we reported and wrote about here on May 2, Fresh & Easy Neighborhood Market is touting 12 of its fresh & easy store brand organic food and grocery items at everyday low-prices for the month of May.

In this piece, we had Fresh & Easy Buzz corespondents in Southern California and Arizona do price comparisons on some of the 12 items at competing supermarket chain stores in the two market regions. The fresh & easy store store brand organic products our correspondents compared came in first place in terms of having the overall lowest prices.

This week, Safeway Stores, Inc., which operates over 700 supermarkets under the Vons, Vons Pavilions, and Safeway banners in California, Arizona and Nevada--which are the three regions in the Western U.S. where Tesco has it current 61 Fresh & Easy grocery stores--is promoting and advertising a number of its popular O' Organics brand organic food and grocery products in its weekly advertising circular and in its stores for reduced, promotional prices.

Three of the O' Organics items are the same as three of the 12 fresh & easy store brand items Fresh & Easy Neighborhood Market is touting as being everyday low-priced affordable organics in its stores this month.

Below is a price comparison between the three fresh & easy store brand and Safeway O' Organics brand items:

Category: Peanut Butter
Item: fresh & easy brand organic creamy peanut butter, 16oz @ $2.98
Item: O' Organics organic creamy peanut butter, 18oz @ 2-for-$5.00 (or $2.50 each)
Winner: Safeway's O' Organics brand by 48-cents per unit
Comments: Keep in mind the fresh & easy organic peanut butter is at an everyday price, while the Safeway O' Organics peanut butter is at a one week promotional price. That means the O' Organics brand will increase in price next week when the promotion ends. Also: the O' Organics brand does contain two more ounces than the fresh & easy brand.

Category: Cheese
Item: fresh & easy brand organic shredded cheddar and Monterey Jack cheese, 6oz @$2.39
Item: O' Organics shredded or chunk cheese, cheddar & Monterey Jack plus other varieties, 6-8oz @ 2-for-$7.00 (or $3.50 each).
Winner: fresh & easy organic brand by $1.11 per-unit. fresh & easy brand is a clear winner on this item by a city mile.
Comments: A savings of $1.11 a package for the cheese is a "big" deal. This is especially true because the fresh & easy brand cheese is at an everyday retail price, while the Safeway O' Organics brand cheese will go back to its regular price after the promotion ends early next week.

Category: Organic Eggs
Item: fresh & easy brand medium organic and cage-free brown eggs, 1 dozen @ $1.99
Item: O' Organics organic large brown eggs, 1 dozen @ $4.19
Winner: fresh & easy organic eggs by a whopping $2.20 per 1 dozen eggs package.
Comments: Not only does the fresh & easy brand of organic, cage-free eggs beat out the O' Organics brand by a city mile, it does so by an added country mile.

The fresh & easy brand eggs also are cage-free, while Safeway's O' Organics brand doesn't include that attribute in the ad circular.

Additionally, while the O' Organic brand brown eggs are the large grade, which is the most popular among Western USA consumers, at a savings of $2.20 per dozen package, we think most shoppers would be motivated to go with the fresh & easy brand organic medium grade eggs. In fact, a consumer could purchase two dozen of the fresh & easy brand eggs, which equal far more egg yolks by volume than a dozen large grade eggs, and still save 21-cents.

We wanted to include one additional category, coffee, in the price comparison.

The reason we're separating it from the above three organic items, is because the Safeway brand coffee we will compare to the fresh & easy brand organic coffee isn't organic. Rather, Safeway is advertising its premium quality Safeway Select brand coffee this week in its advertising circular. You will see why we are including it in the price comparison below.

Item: fresh & easy brand organic breakfast blend ground coffee, 12oz package @ $4.99
Item: Safeway Select Premium Coffee, 10-12oz packages @ $5.99
Winner: fresh & easy brand organic breakfast blend coffee by $1.00 per-package.
Comments: Despite the fact the Safeway Select coffee isn't organic coffee, fresh & easy brand organic coffee still wins the price comparison by a whopping $1 per package. This is even more impressive from a price standpoint because the fresh & easy brand coffee is organic coffee and the Safeway Select brand item is not.

Further, some of the varieties of the Safeway Select Organic coffee priced at $5.99 package are 10oz, while all of the fresh & easy brand organic coffee is 12oz.

Lastly, keep in mind the pricing for the fresh & easy brand organic coffee is an everyday price, while the Safeway Select coffee is at a one-week promotional price. In other words, after this week, the Safeway Select brand coffee will be price higher than the $5.99 package in Safeway-owned stores, while the fresh & easy brand organic coffee will remain at $4.99 for the 12oz packages.

Note: We've seen the Safeway Select brand coffee everyday-priced at $6.49 -to- $6.99 in various Safeway stores. The reason for the variance in the price is because Safeway operates on zone pricing, depending on where its stores are located.

Analysis

Despite the fact the pricing on the fresh & easy brand organic items is on an everyday basis and the Safeway O' Organics items are promotional-priced this week--which should give the advantage to O' Organics--the fresh & easy brand cleans O' Organics' retail pricing clock on two of the three organic grocery items compared--and even on the one fresh & easy organic item (the coffee) compared against a Safeway (Safeway Select) store brand coffee that is premium but not organic.

The only item of the three organic grocery products Safeway wins on with the O' Organics brand is the peanut butter. The O' Organics brand is 48-cents cheaper than the comparable fresh & Easy brand, as well as containing two more ounces of peanut butter in the jar. However, keep in mind that the Safeway price of 2-for-$5.00 or $2.50 unit is a one week promotional price, while the fresh & easy organic creamy peanut butter sells for $2.98 in the stores everyday.

On the other two organic items however--the organic cheese and organic cage-free brown eggs, the fresh & easy brand wins over O' Organics brand by both a city and country mile combined.

The fresh & easy brand organic cheese is a full $1.11 per-package cheaper than the comparable O' Organics brand organic cheese, and the fresh & easy brand medium grade cage-free organic brown eggs are a whopping $2.20 per-dozen less than the O' Organics large grade organic brown eggs are.

We make no claims as to the relative quality of the two retailer brands compared, although both are certified organic under the U.S. department of Agriculture's laws. Our purpose in this piece is merely to show the price comparisons on the two brands.

Additionally, we wouldn't normally conduct a comparison of one brand at an everyday low-price compared to another brand's items offered at a promotional price. However, as you can see, the fresh & easy brand still does far better overall despite this advantage going to Safeway's O' Organics brand because its respective items are on promotion. Even more so is the fact the fresh & easy brand organic coffee beats out the non-organic Safeway Select coffee by a full $1 per package, as the data above shows.

Conclusions: Going Forward with a plan at Fresh & Easy

Based on this analysis, along with the price comparisons we had our correspondents do previously as reported here, plus another price comparison we currently have in the works, it's clear to Fresh & Easy Buzz that Tesco's Fresh & Easy Neighborhood Market has a compelling story to tell in terms of its low everyday (and affordable) price on the respective 12 organic grocery items--and maybe more.

We know this, and those of you reading this piece now know it as well. However, very few consumers in the Southern California, Phoenix, Arizona Metropolitan and Las Vegas Metro markets know it. It just might be one of the best kept organic food and grocery product affordability at retail secrets in the three respective marketplaces.

As a way to share this organics affordability secret, we suggest Tesco's Fresh & Easy run a two-week print advertising campaign devoted exclusively to these 12 affordable organic food and grocery items.

We would run a full page ad--an attractive but minimal looking one--in the food sections of the major newspapers in each market: The LA Times, Orange County Register and one other paper food section in the Inland Empire region for example in Southern California; the two main papers in the Phoenix, Arizona region; and the top newspaper food section in Las Vegas.

The theme of the full-page food section newspaper ad would be something like: "Fresh & Easy: Organics For Less." Or..."Affordable Organics...A Fresh & Easy Choice." We would include pictures of a few of the 12 affordable, everyday low-priced organic items, along with a listing of all twelve items and their respective everyday prices.

We also would do a price comparison between the 12 fresh & easy brand organic items and the everyday prices of 12 identical or similar Safeway O' Organics items and Whole Foods Market's store brand organic products, and include that price comparison in the ad. Fresh & Easy will have the lowest everyday retail prices on the 12 items compared to Safeway and Whole Foods. (Yes, that's the other project we currently have in the works.)

Based on our analysis, we believe Tesco's Fresh & Easy Neighborhood Market has a compelling story to tell about the affordability of organic food and grocery items in its stores compared to the competition in its three market regions. However, unless that story gets widespread publicity, it will remain a secret discovered only by the few.

Affordable organics could be a major drawing card for Fresh & Easy, especially in the current recession in the Western USA. However, in order to create the level of consumer awareness to make a difference (that is shoppers buying the items in the stores), Fresh & Easy needs to do more than send out press releases about it and rely on the good will of the consumer press to write about it, although we agree that's a good strategy along with the ad campaign we described above.

Good stories like being the potential low-price leader in the organics category require a selective advertising campaign, in conjunction with a PR-oriented one, that a retailer can control. It's your message, who can tell it better, is how we view it.

We think the limited newspaper food section print campaign is a good one for a couple of reasons.

First, it targets consumers in the key organics category. The most "food-interested" consumers regularly read newspaper weekly food sections; and these are the people a retailer wants to target when it comes to organics.

Second, the full page newspaper advertisements best allow (of all media) for both the visuals, the pictures of some of the 12 items, as well as the text--the price comparison data between the fresh & easy, Safeway O' Organics and Whole Foods Market store brands (the 12 items).

Lastly, right now a retailer can get a very good buy on full-page ads in the food sections of daily newspapers. Newspaper ad revenue is at an all-time low, and space is available at a discount.

Meanwhile, if the prices of the 12 items Fresh & Easy Neighborhood Market is touting as "affordable organics" this month in their stores are indicative of the overall retail prices of all of the items in its organic food and grocery products category, the grocery chain should prepare another press release for June, with 12 new and different organic items at affordable, everyday low prices. There is a story to tell in our analysis.

Editor's Note: We suggest Tesco's Fresh & Easy Neighborhood Market post some pictures of its fresh & easy brand organic items up on its website so that if and when the consumer press writes about the products the photos are there and handy for them to use.

There are a total of four photographs in the "Newsroom" section of Fresh & Easy's corporate website: two shots of store interiors, one photo of an in-store produce department, and one picture of a store exterior.

Since the central focus curently of Fresh & Easy's store brand marketing campaign is to reach out to the consumer press via a public relations effort, it might want to include a few pictures of those store brand items on the website. Doing so would make much good sense.

3 comments:

Bear-Dog said...

Check your addition. Two dozen fresh and easy eggs would be $3.98 vs one dozen O organics for $4.19. This would still be $0.21 CHEAPER, not more.

Fresh & Easy Buzz said...

Thanks for being a good reader. Typo fixed. Will buy the writer a new calculator; he's stills using an abacus. A solar-powered calculator of course.

Fresh & Easy Buzz Editor

Anonymous said...

Does anybody have an opinion on which brand taste better. That's about equally important to me along with price.

I'm had some O'Organic products and found the taste good overall. Have not tried any fresh-easy products yet.