Monday, June 16, 2008

The Brief: Which One is the Real Story About Fresh & Easy Neighborhood Market's Three Month New Store Opening Pause?

Yesterday, we published this story from the Financial Times, in which reporter Elizabeth Rigby interviewed Tesco Fresh & Easy Neighborhood Market USA CEO Tim Mason, which was published in the Sunday, June 16, edition of the financial publication

In the Financial Times piece, Ms. Rigby, directly quotes CEO Mason as saying about Fresh & Easy Neighborhood Market's three month new store opening pause, which began in April and ends on July 2, when a new store in Manhattan Beach, California opens: That the (three month pause) break "hadn't always been planned."

Below is the Financial Times' story from yesterday (reprinted in italics), with the relevant paragraph (paragraph number 8) in bold:

By Elizabeth Rigby in Los Angeles
Published: June 15 2008

Tim Mason, chief executive of Tesco’s US operation, has hit back at critics of the Fresh & Easy chain and signalled that Tesco is preparing to expand beyond the West Coast.

In his first interview since launching in California last November, Mr Mason told the Financial Times that Fresh & Easy was thriving, in spite of suggestions of poor early results.

He said the decision to bring in US-born Jeff Adams as an operations director was about preparing for the future, rather than a signal that the new business was struggling.

“We have always known we will need more executive vice-presidents in operations because this country is so big that as soon as we go into a new geography, we will need someone to run it, so we have brought him in a little early,” said Mr Mason, adding that rumours he was returning to the UK were a “complete fabrication”.

Tesco’s US ambitions are being closely followed by investors and competitors. The British retailer is investing up to £250m a year in the next four years on the West Coast and could end up with a multibillion-pound business if it succeeds in a market where many British retailers have failed.

A bullish Mr Mason dropped heavy hints that Mr Adams, the former Tesco chief in Thailand, would be deployed to another part of the US – most likely to be in the Chicago and the Midwest – once the 61-strong chain reaches critical mass in California, Nevada and Arizona.

Expansion would require more investment than the £1.25bn earmarked for the five-year West Coast project. Asked whether Tesco was ruling out a move beyond the West Coast until after 2012, Mr Mason said: “I wouldn’t say that. We wouldn’t do anything else until we have explained how we are doing here.”

Mr. Mason, who unnerved investors and analysts when he “paused” the store roll-out programme in March for three months, admitted that the break “hadn't always been planned”, but said he was “surprised that everyone went mental” on news of the three-month break.

“I was critical of myself, really, because you ought to see these things coming.

“I felt that it was just so obviously the right thing to do having opened 60 stores,” said the executive on his first public store tour since launch.

Mr Mason also clearly states that the three month new store opening pause was not always planned in this transcript of the interview with him by staff writer Elizabeth Rigby, published as well in the June 16, 2008 edition of the Financial Times. Below is the relevant Q and A:

Financial Times: So it (the three month pause) had always been planned but you just hadn’t told anyone [externally] about it?

Tim Mason: It hadn’t always been planned. One of the views that I have about being successful in business is not your ability to foresee everything and plan for it, but your ability to change to changing circumstances. Actually, your teams have to able to cope with change, and people can’t have a nervous breakdown when you do it and so what we much more about saying was, given the number of stores we have opening it would be much more sensible that instead of using that energy to open stores we should us that energy to have a series of projects about opening stores better.

Things like how you make them launch better, how you get them going better. The second stream of work is how you align the amount of stock you need with the sales you are going to get, because the problem is because you err on the side of the customer you have a lot of stock.

The Brief

On March 29, 2008, Fresh & Easy Buzz was one of the first publications to report on the three month new store opening pause, after reading a March 26, 2008 post about it by Tesco Fresh & Easy Neighborhood Market marketing chief Simon Uwins in his corporate blog. You can read our March 29 piece about the new store opening pause here. It includes our analysis, based on sources, that the "pause" wasn't always planned.

In his March 26 blog post, which was the first announcement of the "pause" by Fresh & Easy Neighborhood Market, Uwins says in the relevant paragraph from the post:

"However, after opening our first 50 (Fresh & Easy stores), we planned to have a 3 month break from openings, and other than a couple more in Phoenix, we're taking it (albeit, in our usual fashion, with 59 stores already open)."

As is perfectly clear from reading Mr. Uwins' post, and the relevant paragraph in bold above, he is saying Fresh & Easy Neighborhood Market planned the three month new store opening pause all along; after the first 50 stores were opened.

However, that's the complete opposite of what CEO Mason told the Financial Times reporter, and she quoted him directly as saying, in yesterday's piece, as you can read above.

Further, it is a fact that every Tesco PLC and Tesco Fresh & Easy Neighborhood Market spokesperson and executive quoted in the press since Mr. Uwins' March 26 "pause" announcement post on the corporate blog, and up until yesterday's Financial Times' piece in which Mr. Mason says it wasn't always planned, has stated to the press the three month new store opening pause was always planned, just like Mr. Uwins reported in his March 26 blog post, which you can read completely for yourself at the link above.

Further, here is a link from Google to numerous stories written about Fresh & Easy's three month new store opening pause, first announced by Mr. Uwins in his March 26, 2008 blog post. Feel free to read through as many of the stories as you like--and do your own key word searches as well. We doubt if you will be able to find one story in which a Tesco Fresh & Easy Neighborhood Market spokesperson says the three month new store opening break wasn't always planned.

The evidence suggests from March 26, 2008 -to- June 15, 2008 (the day before the Financial Times' piece was published) Tesco Fresh & Easy Neighborhood Market's corporate communications line has been as Mr. Uwins first wrote in his blog, and was repeated by corporate spokespeople, that the three month new store opening pause was always planned.

That is until yesterday of course, when Tesco Fresh & Easy CEO Tim Mason is quoted as telling the reporter for the Financial Times that the three month new store opening break wasn't planned all along at all.

Therefore, based on this empirical evidence, it appears the story line from Fresh & Easy for nearly the last three months has either not been true, that Mr. Mason was misquoted in yesterday's Financial Times story, or that there has been one very big mix up in terms of story lines at Fresh & Easy Neighborhood Market headquarters.

Fresh & Easy Buzz has never thought the three month new store opening pause was that big of a deal, like many other publications did, or it appear Fresh & Easy thinks they did. Although, as we reported here on March 29,2008, we did know it had much more to do with merely "kicking a few tires," and such--which also if fine. Much of what the pause had to do with--creating a warmer store decor package, adding new products and other changes, all things interestingly enough we've been suggesting for months--have played themselves out since April.

Even though we were one of the first publications to break the news, we have never been one of the analysts that's gone "mental," to quote Mr. Mason from yesterday's Financial Times piece.

However, we do get somewhat "mental" over what can only be one of three possible reasons for the discrepancy between Fresh & Easy's nearly three month story line that the new store opening pause was always planned and CEO Mason's statement in yesterday's Financial Times that the "pause" really wasn't always planned after all: (1) False communication to the press for nearly the last three months, (2) a very serious misquote (which we doubt is the case) by the esteemed Financial Times, or (3) an extremely serious communication problem among Fresh & Easy Neighborhood market executives and spokespeople, which if it were the case would likely send Tesco PLC CEO Sir Terry Leahy to the bullpen not just for relief pitchers, but for replacements. Neither of the three options above are good ones.

Corporate spokesman don't say what they want to say; they are paid to communicate the company, and CEO's message. Therefore, we doubt if the Fresh & Easy corporate spokesman and the other executives were unclear on what to say for the last nearly three months. However, CEO Mason's statement published in the Financial Times interview yesterday is the complete opposite of what they have been telling the press for nearly three months.

Therefore, we are left with a brief, supported by empirical evidence, that for nearly three months Tesco's Fresh & Easy Neighborhood Market told the media the three month new store opening pause was something that was always planned. But yesterday, the CEO of Fresh & Easy, Tim Mason, told the Financial Times the complete opposite.

The first tactical rule of corporate communications is to get your story straight among all the players. But that's merely tactical. The ethical and correct rule of corporate communications for all corporations that want to have credibility with the press and other stakeholders is to tell the truth, or don't offer uneeded details or explanations in the first place.

Further, if you do create a story line, make sure all the players stick to it. Having the CEO state something completely the opposite of what company spokespeople have been telling the press for nearly three months isn't likely to add to their--or the company's--credibility quotient. In fact, it likely will tarnish it greatly.

If Mr. Mason was misquoted in yesterday's Financial Times story, or if there has merely been a huge mix up in terms of the corporate story on the pause at Fresh & Easy headquarters, we suggest the company correct the record right away; either in stating Mr. Mason was misquoted in the Financial Times' piece, or that there was a serious communications melt down among Fresh & Easy headquarters people in terms of the nearly three month story line that the three month break had always been planned, when it really hadn't, as Mr. Mason is quoted as saying in the Financial Times story yesterday.

Alas, we don't think either an explanation or correction will be forthcoming. We also are surprised the Financial Times' editors who edited yesterday's piece didn't catch the discrepancy. Of course, it happens to the best of us.

Meanwhile, without some explanation of this major discrepancy from Fresh & Easy Neighborhood Market CEO Tim Mason and the other executives who've been acting as spokespersons telling the press for the last nearly three months the new store opening pause was always planned, serious and discerning members of the press, as well as other stakeholders, are going to view the company's credibility with a rather jaundiced eye, since this brief is based on what was said by the players, and nobody else.

Perhaps there's a simple explanation for this discrepancy? If so, although we don't speak for anybody but Fresh & Easy Buzz, we think other members of the press, as well as other stakeholders, would like to hear it, as we would.

No comments: